Rising living costs continue to squeeze household spending plans
New Zealanders are showing the first signs of renewed financial confidence heading into 2026, even as high living costs continue to weigh heavily on household budgets.
A new MYOB poll of 1,000+ adults shows 35% expect to feel financially better off within a year, 38% expect no change, and 24% expect to be worse off.
MYOB Chief Customer Officer Dean Chadwick (pictured) said households are continuing to adjust to tough conditions.
“New Zealanders have shown remarkable resilience… we are starting to see a shift in confidence, likely helped by easing interest rates and a sense that the worst of some cost pressures may be behind us.”
That early lift in sentiment comes as SMEs tighten operations, with 35% cutting costs and 40% reporting weaker customer spending – clear signs cautious households are still flowing through the wider economy.
Costs dominate 2025 budgets
Despite a more optimistic outlook for 2026, 42% of respondents say they feel financially worse off than a year ago, and a third say nothing has improved.
Food and groceries (66%) remain the biggest pain point, followed by electricity and gas bills (52%), and housing-related costs including rates (34%) and rent (29%). Insurance pressures (28%) are also squeezing households – factors that continue to shape borrowing capacity and refinancing needs.
“These are costs that hit home week after week,” Chadwick said. “Any relief people are starting to feel is being balanced by a very real awareness that budgets are still tight.”
Nearly two-thirds of New Zealanders feel some level of financial stress heading into Christmas.
Christmas budgets tighten as more turn to extra income and credit
With household budgets stretched, many New Zealanders are planning a conservative festive season.
Twenty-four per cent will rely on bonuses, seasonal work, side-gigs or extra business activity to cover Christmas costs, while another 24% plan to use more credit or BNPL than last year.
“For many Kiwi families, the pressure to spend up over the season can be particularly tough – especially when relying on credit,” Chadwick said.
More than half (56%) expect to spend the same on gifts as last year, 15% will spend more, and 28% will cut back. Average planned gift spend is $140 per person, with $415 budgeted for food and drink.
Chadwick encouraged those who can afford it to support local retailers: “Choosing to buy local can make a real difference to our economy, Kiwi business owners and the people they employ.”
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