This story was published in the herald a few days ago (again a victim of the sever move)

http://www.nzherald.co.nz/surviving-the-recession/news/article.cfm?c_id=1502812&objectid=10584518

Almost half of working New Zealanders would only last a month on their savings if they lost their job, a new survey shows.

More than a quarter say they will need to use their credit cards to pay bills in the coming quarter.

People in the 18 to 34 age bracket were particularly vulnerable, according to Dun and Bradstreet’s survey of consumer credit expectations released yesterday, with 55 per cent only able to survive for four weeks if they weren’t working.

It would be interesting to break out the people who are still living at home and see this figure without them, I think it would be even higher.

This compares to 46 per cent for Kiwis aged 35 to 49 and 32 per cent of those aged 50 and over.

Well this actually makes a lot of sense because of course as you move through life you earn more, and can save more, and pay off that student loan and other debts that you start you adult life with.

The survey, which interviewed 905 New Zealanders online, focused on expectations for savings, credit usage and spending between July and September.

The younger age groups were also more likely to spend money they didn’t have, with 34 per cent using credit for purchases.

This is a concern because if people are using credit they don’t have when they don’t need to when the tough times hit and you do need it you won’t have it to use. However credit for younger people is often offered because you can offset it against your future earnings so it can work well to get you though tough times.

Of those over the age of 50, 19 per cent said they would use credit.

Again this comes down to the stage of life at your at.

The younger age brackets were also more likely to apply for new credit or a credit limit increase.

BNZ spokesman Tony Alexander said New Zealanders’ household saving rate was one of the worst in the OECD.

“We are definitely a nation of household borrowers rather than savers.

“We don’t save much so if we get made unemployed we don’t have much to live on for very long. If we get sick we have to rely on the state rather than funding our own healthcare.”

The unemployed statement makes sense. The healthcare statement does not. We have universal healthcare in NZ and that is a good thing, and if you don’t believe that go and watch the movie Sicko.

He said saving should not just be about preparing for retirement.

“There’s more than just whacking your money into Kiwisaver. We should, all of us in some way, have these precautionary savings that are built up in case we get unhealthy or become unemployed.”

And this is a flaw with Kiwisaver, the fact that no matter what it is impossible to get your money out until you reach 65. And is yet another reason why I have not opted in.

Now I know if I lost my job I could last longer than a month… Just. If I lost all my sources of income (one off jobs and the like) I would be in a reasonably dire situation pretty quickly. However, this is the life of a student.

Tags: Credit, Money

This entry was posted on Friday, July 17th, 2009 at 8:35 pm and is filed under Comment and Opinion. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.