How we are ‘beating’ inflation
Inflation has a hit a 30 year high. New Zealand is not alone; here’s how our just-announced 6.9% inflation rate compares with the rest of the world as of March 2022:
China - 1.5%
Singapore - 4.3%
Australia - 3.5% as of Dec 2021
Canada - 6.7%
United Kingdom - 7%
United States - 8.5%
The Netherlands - 9.7%
Spain - 9.8%
Russia - 16.7%
Argentina - 55.1%
Turkey - 61.1%
Holy shit, Turkey!
So how are we ‘beating’ - inflation? For my husband and I, it’s a combination of lifestyle choices, earning more, and cutting costs.
I received a pay rise.
In April 2022, I received a 5% pay rise along with my bonus, where I had achieved 95% of the bonus target. If you work in a corporate job, you’re likely to have a yearly performance review and receive a pay rise, too.
I’m not an expert on how to be an exceptional employee or how to always exceed expectations and targets, but there are a few things I am particularly mindful about. When I first started the job, I found out what the KPIs were, noted them down, and made an effort to focus on them, being aware of how my performance was being measured. Whenever I didn’t know something and asked for help, I would make sure I learned how to do it for myself next time. Even now, if I ask for help and someone simply gives me the answer, I ask what process or resources they used to find it, so I can become more self-sufficient. In my everyday work, I take note of what works and what doesn’t, write a lot of note reminders, and practise, practise, practise!
If you are planning on asking for a pay rise, keep a record of every compliment and piece of positive feedback you receive from clients, customers, managers, and fellow staff. Have stats ready for how much you have improved efficiency or quality in your workplace, in solid numbers (‘I increased conversion by x%.’) Be sure to focus on how your experience, knowledge and performance contributes to and benefits your workplace, rather than simply listing out your achievements; translate it into what it means for the company.
If you aren’t successful in negotiating a pay rise, look at negotiating other benefits or work perks. Could you work from home more often, saving you time and money? Could you be covered for study to upgrade your skills and knowledge, which will help you land a higher paying role in the company? Could you condense your work week? (Don’t forget, in New Zealand you can apply for flexible working arrangements.)
If you are currently being underpaid, another option is to look elsewhere. Maybe it’s time to try something new, or find a better employer. Last year, I landed a new job that paid $14,000 more, after two months of applications, psychometric tests, phone interviews, interviews, and second interviews. Exhausting? Yes. Worth it? Also yes. Check out Trade Me Jobs for great career advice, including their helpful salary guide.
My husband finished paying off his student loan.
After 12 years, my husband has finally finished paying off his student loan! This has increased his fortnightly take-home pay by 13.2%. With so many deductions between our gross and net income - ACC, income tax, KiwiSaver contributions - it’s a relief to have one less thing to pay.
He did this through normal student loan repayments, plus a few extra manual repayments here and there - nothing crazy. If you are close to paying off your student loan and want to get there faster, like I did three years ago, you can make extra repayments via MyIR, or by doing it from your bank. It’s easy! Your app will have a ‘Pay tax’ or ‘Pay IRD’ option; simply put in your 8 or 9 digit IRD number (a 0 at the front if yours is 8 digits), the tax year (e.g. 31/03/2022), and the code SLS.
To find out how much more you’ll have in your take-home pay after paying off your student loan, you can go to a PAYE calculator like this one and alternate between having ‘Student Loan’ ticked and unticked. You’ll see the difference in real dollar figures!
Saving money with work perks.
I have had a number of work perks since last year, but have only recently started using them. One of them is a health & wellness benefit, which is a contribution of $500 towards any gym or fitness provider. It’s a perk I used to have working for another insurance company as well, and which seems to be becoming more common in corporate workplaces (hooray!). I used my health & wellness benefit towards a local yoga studio that I’d already been going to weekly, saving me $25 per class. Yin yoga classes have done wonders for my mental health and stress levels, so I am incredibly grateful to have been able to use this benefit.
My employer also offers free health insurance, with a low additional premium to add another person. Because of this, we were able to take out a new joint policy, cancel my husband’s health insurance, and switch him over - saving 9% on health insurance premiums.
Earning extra income.
We recently earned $200 by being guinea pigs in clinical research - a study done by the University of Auckland’s psychology department; a study about romantic relationships and work/life balance. They wanted couples to complete a few tests, followed by an onboarding survey, a daily survey for 3 weeks (i.e. 21 daily surveys), and a follow-up survey. Given the choice of reward, I chose $100 in Countdown gift cards, and he chose $100 in Westfield gift cards.
In March, I participated in another clinical study done by Massey University; a study on brain damage. They wanted people who weren’t brain damaged to complete a few tests, which I can only say was something like the psychometric tests you get when you’re applying for a job, only weirder. Identify the next one in a pattern. Select the correct colour of a word that pops up, even if the word itself spells out the name of another colour (e.g. the word ‘blue’ written in yellow). It was 1.5 hours of mental exercises, and worth the $20 Countdown gift card I earned from it.
If you also want to earn money from clinical studies, follow local universities on social media - that’s how I found out about the studies I signed up for!
Reducing weekly expenses.
Last month, we saved money on our week’s meals by skipping our Hello Fresh for that week, and taking advantage of a first-time offer to try Woop at 40% off.
Our usual weekly Hello Fresh meal kit costs $93.93 - no extras - while a Woop ‘Foodie’ meal kit cost $129 at the time. Instead of $93.93, we paid $77.40 for that week, saving 17.6% while still getting the same number of meals (3 meals for 2 people). We actually found Woop to be much higher quality than Hello Fresh, with ingredients that were fresher and more pre-prepped.
This month, we are saving money by using My Food Bag’s first-time offer - $100 off, discounted as $50 off your first two boxes. For the same number of meals, it is normally $112.99, so with $50 off, making the box $62.99, we are saving 32.9% on our usual price of $93.93.
We plan to continue doing the same thing with other meal kit subscriptions whenever we can - skipping Hello Fresh and using first-time discounts for that week. Not only do we save money, we get more variety, too. We’ve also saved $50 off our Hello Fresh a few times, after someone has signed up for Hello Fresh via my referral - i.e. after they’ve tried out a free box and enjoyed it! I have several free boxes to give away, so if you’re interested in week’s worth of meals, please let me know - or get $100 off here.
Of course, looking at the bigger picture…
We are investing so that our money beats inflation - in the long term.
I currently invest in shares through Sharesies, Hatch and Stake. So far, Sharesies has been the best to use for me as I find it the most user-friendly, and it provides access to many New Zealand companies I personally care about and which align with my values. Meanwhile, my husband invests in shares through his company’s discounted share plan, where part of his annual salary is used to purchase shares in the company. This renews for him every year. We also have a small amount invested in managed funds.
Our investing timeframe is long term (over 20 years), so at the moment, we’re simply making sure we remain consistent - and patient! - to reap the rewards in our 50’s to 60’s.
I hope you’ve found a few ideas for what you could do to cope with the increased cost of living right now. If you need help with your finances, here are some resources to check out:
Taking a savings break from KiwiSaver
Christians Against Poverty money course
All the best,
Sophia
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