Personal Finance

How COVID-19 has affected our personal finances

Hello friends,

I hope you are doing okay during these crazy times! Personally, I have been doing my best to stay sane and practise self-care while at home by doing more of the things I love: reading, writing, and taking online classes that excite me. (If you’re not from New Zealand, our country is currently in a 4 week lockdown, so everyone is staying at home, in our ‘bubbles’ – except for grocery shopping, essential services and enjoying local scenery).

Today, I want to share with you my thoughts & experiences on how COVID-19 has affected money and personal finances. I imagine that life looks very different for most of us at the moment, including how we handle our money and what our incomes & expenses look like. I hope this helps you if you’re looking for ideas – and the knowledge that you’re not alone.

How our incomes have been affected

My partner’s income
My partner is definitely very lucky. Long before the level 4 lockdown, when the COVID-19 alert level was still at level 2, his workplace had already asked all their staff to work from home. To help make it easier? His company is giving every staff member $400 to set up working from home, then $40 a month towards our internet bill!

This generosity can probably be attributed to the fact that he works for the largest insurance provider across Australasia (proudly also my former workplace!), and continues to operate as an essential business. We are very grateful.

My income
I don’t get any fancy perks, but I also feel lucky. Our workplace has all office staff working from home, and apart from a few, we now get to work 4 days / 32 hours a week (from 5 days / 40 hours a week), with pro-rata pay – 80% of our normal work hours for 80% of our normal pay. We do have the option of topping up the other day / 8 hours with our annual leave, which I’ve personally chosen not to do. Earning 80% of what I do now is something I had already anticipated and budgeted for when I was job-hunting for a 4-days-a-week job, and I am thrilled to have more flexibility!

My rental income
I haven’t changed how much I am charging – mostly because it is low to begin with. Likewise, I continue to pay the same mortgage repayments as I did before, so property-related income & expenses haven’t changed for me at all.

With our income now 100% of my partner’s income + 80% of my salary income + 100% of my rental income, our total net income has actually reduced by 8.6%. A reduction, but a manageable reduction – especially with a new budget. More on that later!

How our expenses have been affected

Now that we have more time to cook, we’ve re-subscribed to Hello Fresh! We’re really enjoying our weekly boxes filled with inspiring recipes. Our standard 3 recipe box costs $95 a week, but additional recipes cost us $19.90 ($9.95 per person) – a great optional extra, like this week’s special recipes for Easter lamb & chocolate brownies! Overall, this new expense costs us $190 – 270 per fortnight. 

PS. This also means we rarely have to go to the supermarket, so lessens our exposure to others at a time when this is important!

Unsurprisingly, fuel & public transport costs are now $0 while our power bill has increased. Since January 2020, our fortnightly power bill for 3 adults has been an average of $64.30. For the fortnight just been, it was $76.10. Considering my partner and I were actually away for 5 of those 14 days (while stuck in Queenstown), it’s worth noting that our power bill has already increased by 18%!

Our internet bill has reduced thanks to my partner’s work subsidy – so instead of $85 a month or $42.50 a fortnight, it’s now $45 a month or $22.50 a fortnight.

We bought some new essentials for our home! We’re both very excited for our new 27″ curved gaming monitor – bought for WFH purposes (but also means I can use Chromecast in the bedroom while my partner plays games on the TV in the lounge – hooray). This costs $528 retail price, which I get a modest staff discount on. I also invested in plush new goose feather & down pillows and a queen-sized goose feather & down duvet. (I imagine sleeping with it will feel like being hugged by giant, fluffy marshmallows.) If anyone’s interested, both are currently half price thanks to a promotion on luxurious Royal Comfort! 

I also spent $155 on an annual Masterclass subscription by getting the ‘buy one, get one’ offer for $310. Luckily, I asked on Instagram if anyone wanted the other membership, and a friend offered to buy it within a day!

How to manage your money / my personal tips

Right now, I feel like uncertainty around money is perfectly normal – and because of that, peace of mind should be our number one priority. If you feel the same, here’s what I am personally doing to future-proof my finances and give myself one less thing to worry about.

Prioritising liquid savings 
I normally send 20% of my pay to a bonus savings account, which is the type of account that earns you the most interest (base + bonus credit interest) and incentivises you to keep saving by penalising you if you make more than one withdrawal. At the moment, I’m sending my savings to an on-call savings account instead, and my partner is doing the same.

What’s the difference? An on-call savings account still earns you interest, but you won’t be penalised if you make withdrawals. A lot of on-call savings accounts are exclusively online accounts too – with fees for transactions at the bank – and since none of us are going out anyway, they’re perfect to use during this time.

Why prioritise liquid savings? Because right now, your savings locked away in a term deposit or any other long term investment isn’t going to benefit you if an unexpected expense comes up – or if you find yourself a little short for rent this month. Using an on-call savings account means you can still earn interest, but access your money at any time should you really need it!

Some on-call savings accounts: Kiwibank | BNZ | ASB | TSB | Heartland Saver

This crisis has hit our Kiwisavers hard, with everyone’s balances reducing by hundreds or thousands of dollars. But because Kiwisaver is just like any other investment, these ups and downs are natural and inevitable. It’s worth riding it out and not switching funds, because the minute you do, you are accepting and locking in your losses, rather than giving them time to bounce back.

Personally, I’m not worried about my balance – it has gone drastically up and down and in fact, is back to what it was before the crisis today! This is just me, though – I have put mine on 50% Balanced, 50% Growth so will weather more ups and downs.

If you are extremely worried about your Kiwisaver, or plan to withdraw your savings within the next 2 years – say for your first home – you can change your Kiwisaver fund to a low-risk Conservative fund – or a Defensive fund if you want to be really safe.

You can also free up more funds by reducing your Kiwisaver contribution rate – the amount that comes out of your gross salary. If you are on a high contribution rate, like 10%, dropping this down to 3% or 4% will of course have a much bigger impact than if you are currently on a 6% contribution rate. You can have a play around here to see what you’d be getting paid if you do change your rates. If it’s worth the hassle, definitely consider this option to give yourself more room to breathe during this time!

Refreshing our budget
Now that our income & expenses look so different, it’s time for a fresh new COVID-19 budget. I wrote a new fortnightly budget for my partner and I, using our new reduced income and updated expenses. Groceries? Down. Hello Fresh? Up. Transport? Down. Power? Up. You get the idea. It’s reassuring knowing that we can still save 20% of our income while paying our bills on time, and while I don’t want to make assumptions, I think it may be fair to say that most New Zealanders can, too – whether they’re at home or in Australia. We are so blessed.

I personally feel that refreshing our budget has given us peace of mind for our finances during this crisis, which is more helpful for alleviating anxiety than anything. So if you haven’t, you might also find it reassuring and encouraging, too.

Other options to consider

Cancel any subscriptions & services you aren’t using. Check your bank statement – are there payments coming out for things you aren’t getting any value out of? (We did this to our budget, but definitely want to keep Netflix and Spotify Premium for now!)

Reduce your insurance premiums by increasing your excesses, if you are spending most of your time at home (eg. if you’re not an essential worker). This will be different for everyone. I know that my car isn’t going anywhere in the next month and that even if it does, the risk of an accident is significantly reduced, meaning that it’s unlikely I would need to claim and pay a high excess. If you have enough of an emergency fund to pay an excess should you really have to, it may be worth making the most of lower premiums for the time being!

Pay later. I’m not one to encourage people to use services like Afterpay and Laybuy, because it’s easy to use them impulsively. But I feel that if you are financially struggling at this time and needing to buy essentials, now would be the best time to take advantage of them so you can keep more for your liquid savings.

I hope you’ve found this helpful! Here are some more resources you might be interested in:

COVID-19 financial support 

Free & confidential budgeting advice

Looking after your mental health & well-being

Kitty O'Meara

Much love,



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