Despite rising income, affordability remains aloof

Julian Wood – Despite rising income- Julian Wood Web

New Zealand is a rich country, but many households struggle to make ends meet.

Findings from the Statistics New Zealand’s Household Economic Survey shows that around 200,000 households feel that their total household income was not enough to meet their everyday needs.

A further 459,000 households felt that their household income was just enough to meet their everyday needs. This amounts to a whopping 40% of us who say that we are either just getting by, or not making it financially.

Troubling trend

A lot of these were households earning less than $60,300, many under $34,100.

This is expected; making ends meet on low incomes is challenging for anyone.

What was unexpected was that there were around 150,000 households with incomes over $89,800 a year that also replied that their household income was just enough or not enough. This is not poverty, but it is troubling nonetheless.

High mortgage and rent payments are placing a strain on many middle and higher income households. But we have also seen the average new house size balloon from 121 m2 in the mid 1970’s to around 205 m2 by 2010.

That is quite an impressive increase.  I don’t think house size is the only thing over the period that has supersized. We need to talk about expectations and lifestyle choices.

Building expectations

It is easy to build our expectations around what others seem to have, and feel we are entitled to enjoy this as well. As we scroll through social media or watch television, it is not hard to compare ourselves to our peers or even celebrities.  Incredible holidays, the highlights from their latest restaurant experience, or their new phone, they all look amazing.

But it is important to remember that our friends are not often posting about how hard they are working to pay for it all.

I have yet to see one of my friends post their happiness over how big their mortgage is or how long it is going to take to pay off. I have never seen a friend post about their joy at how much interest they are paying on their credit card.

Harsh reality

The reality of many of our lives is that we are in a spiral of unhealthy and unrealistic comparison. Wanting to always mimic the enjoyment of others now rather than later often ends ups costing us more in the long run. Not to mention the sleepless nights worrying over how we are going to pay the next bill.

Unchecked, this cycle of comparison can lead to a place where no matter how hard we try, or how much income we have, we never seem to get ahead. In this unhappy Kingdom our expectations are always unrealistically increasing.
Continually just scraping by is a hard place to be.

There is everything right in working hard to provide the best for our families; we all want to achieve our dreams.

Before we do that work, it would be good to reflect upon just where our dreams are coming from.

Julian Wood is a Researcher at Maxim Institute based in Auckland.

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