We asked Couch members, from late August to early October 2006, how their family incomes and expenses had been affected by a number of changes over the past year. Members were asked if they had budgets, whether they had ever sought budgeting advice and how well they were coping with their level of debt. The impact of price rises was explored and families were asked if they had cut back their spending on food, heating, travel, healthcare services or other family or individual activities.
Many thanks to the 981 Couch members who completed this poll. Most of those who took part (nearly 80 percent) have a family budget with nearly three-quarters keeping to it. About a third of the respondents have sought budget advice with most using informal sources such as friends and family.
The results show many people are cutting back their household spending to make ends meet. Just over half the respondents (51 percent) have cut back or gone without some food and/or grocery items over the past year. Many people (56 percent) have cut back or gone without dental care and 36 percent have reduced or not sought GP care. Many respondents have also pruned their family and individual activities with many (62 percent) cutting back or not taking family holidays.
Overall, nearly half the poll respondents (45 percent) felt they were worse off financially than last year. Thirty nine percent felt they were either the same or better off and 15% thought they were better off financially than last year. Eleven percent said they were struggling or unable to manage their debt.
Those who responded to this poll were mostly female (80 percent), living in an urban area (85 percent) and mostly aged 25-44 (72 percent). Nineteen percent of respondents were aged between 45-54 years.
Nearly 80 percent of the Couch members who took part in the poll have family budgets. Of those who carried out the budgeting, 43 percent were women, 10 percent men and 33 percent shared it with their partners.
Nearly three-quarters (73 percent) of those who have a budget usually keep to it. Over half (53 percent) of those without a budget would like to have one. Ten percent of respondents said they did not feel the need for a budget.
Of the Couch members who took part in this poll, 331 have sought advice at some stage on managing family spending.
Informal sources are widely used for budgeting advice with family and friends being called upon by 30 percent of respondents and 27 percent accessing information on the internet. Twenty percent had used a budgeting service with 14 percent of people receiving advice from a financial planner. Note: respondents may have sought advice from more than one source.
Most Couch respondents (87 percent) felt they had manageable levels of debt. However, 11 percent reported levels of debt that they struggled or were unable to manage.
Nearly half the poll respondents said their rent and mortgage costs had gone up over the past year. Nearly one-fifth (18 percent) reported an increase in income which was helping to pay for the higher costs. Some respondents reported having to make changes to manage increased costs with one quarter (25 percent) saying they had cut spending or reduced savings to pay for higher costs and 5 percent had moved to cheaper accommodation.
Petrol price rises over the past year have impacted on most poll respondents with nearly half (45 percent) cutting back on using the car and not going out as often. Nearly one in five (17 percent) respondents were using other means of transport some of the time. Almost the same number (20 percent) reported cutting spending in other areas to offset increased petrol costs. In contrast, 20 percent of respondents said they used the car just as often and had not cut spending in other areas.
The rise in electricity prices has affected some people more than others. Twenty percent of respondents have found other ways to keep their houses warm in response to the prices rises. Over a quarter (26 percent) of the respondents said they have cut other spending, increased debt or reduced savings to make up the extra costs. One-quarter reported absorbing the costs without having to cut their spending, increase their debt or reduce savings.
Over half the Couch respondents (51 percent) have cut back or gone without some food and/or groceries items over the past year. Other groceries (36 percent) and other food items (33 percent) were most likely to have been cut out or reduced in the last year.
Many people reported cutting back or going without healthcare services over the past year. Over one-third (35 percent) said they had cut back or gone without GP visits while over half the respondents (56 percent) had cut back or gone without a visit to the dentist. Over one-third (36 percent) of respondents had not cut back on healthcare services over the last year.
Many poll respondents have reduced or cut back family and individual activities over the past year. Family holidays were cut back or gone without by 62 percent of respondents. Hobbies, sports, cultural and sports activities were individually cut out or reduced by 50 percent of respondents. Fifty percent of respondents had also stopped or reduced buying gifts for friends and family. Twenty percent of Couch respondents had not cut back on any of the items.
Over half (55 percent) of the poll respondents felt they were financially better off or about the same compared with last year. Forty-five percent felt they were worse off compared with last year. (Numbers may not add to 100% because of rounding.)
Is there anything else you want to tell us about budgeting and your family finances?
There was a big response to this question with 446 Couch members providing us with additional comments about their budgeting and how they manage their family finances.
There were a number of common themes. One issue was the need for families to work more to earn enough money to pay the increased costs of living. For some families, this meant both partners returning to full-time work while others have taken on part-time work or increased their part-time hours. Some people expressed concern about the effects of the increased hours of work on time available to spend with their families.
I have gone back to work part-time and this has helped our situation. Our children are 2 and 6 months and I didn’t think I would be working this soon…
My partner has had to work longer hours to cover the increased costs and this has meant less time with me and the kids plus he is often exhausted.
It is a shame that both parents have to work full-time to sustain a ‘normal’ lifestyle. It would be much better if families had more quality time. The level of government help is set very low, we are spending savings just to survive.
Quite a few people said the Working for Families package had made a positive difference. However, a number of people said they were over the threshold for receiving any assistance but were still struggling. They felt they may be better off earning less and being able to obtain financial assistance.
We are right on the cusp. Middle income, where we only earn enough to cover costs, but earn too much to access much government support. We’d probably be in a better financial situation/time if both of us weren’t working and the drop in income allowed us to be eligible for family support.
The costs of children are an ongoing concern with a number of people talking about increased food and schooling costs as their children have matured and how it is difficult to keep stretching an already tight budget.
As the children get older, the expenses are greater and [the] food [bill] gets bigger and bigger. All costs and bills seem to have increased but our income has not. It’s a struggle to make ends meet.
A number of the comments indicate that parents don’t like their children to miss out on activities because they cannot afford them. A number of parents said they put the children first and cut back on a lot of things themselves to try to provide their children with as much as they could.
Many of the poll respondents shared ways of budgeting and saving money which helped them to survive financially and lowered financial stress. These included having a written budget and writing all spending down; growing their own fruit and vegetables; using night-rate power; reading books about actively managing money; planning meals carefully; using the public library; sharing rides; using computer software to track spending and saving; baking bread; buying secondhand clothes and taking in boarders.
Conclusion
The responses to this poll highlight the struggle many families are facing in trying to match their income to their costs. Most respondents have a family budget (80 percent) and a high proportion of these people keep to it (75 percent). However, price increases – such as for petrol and food – have meant many people being much more careful in their spending to make ends meet.
Some people have had to make decisions on what to cut back or go without. Whilst most people said they had not cut back or gone without basics such as fruit and vegetables (75 percent), substantially more reported cutting back or going without GP visits (35 percent), dental care (56 percent), family outings (49 percent) and family holidays (62 percent).
The poll results will be channelled into the Families Commission’s work to improve services and support for families. We will also ensure this information is passed on to other relevant agencies.
A number of Couch members asked for information on budgeting. The following websites may be helpful:
Sorted
NZ Federation of Family Budgeting Services
Citizens Advice Bureau
Finance and financial services information including budgeting services
Thanks again to those who participated in the poll.
