New Zealanders among the world’s worst savers

15 April 2019

New Zealanders among the world’s worst savers

Struggling to save for your first home deposit? You’re not alone. Finder’s analysis of data from the Organisation for Economic Cooperation and Development (OECD) found that Kiwis are among some of the worst savers in the world.

In fact, Kiwis are forecasted to save -1.23% of their disposable income in 2020. Or in other words, they’ll be spending more than they have. With an average disposable income of around NZD$36,148, this means Kiwis will spend an extra $445 they don’t have.

World’s worst savers

Overall, New Zealand ranks in the bottom five countries for saving, ahead of only Lithuania (-4.74%), Finland (-2.58%) and Spain (-1.94%).

World’s best savers

According to the OECD, the Swiss are the best savers, with an impressive household saving rate of 17.64%. The Swedes are a close second at 16.34% and those in Luxembourg third at 13.41%.

New Zealand savings over time

Kiwis haven’t saved a portion of their disposable income in over five years, since 2013. And it’s not the first time they’ve been in the red – New Zealand also had a negative savings between 2005 and 2008. While a negative savings rate might sound bad, it was a lot worse in 2005 when the average savings rate was negative 5.99%.

But they haven’t always been so bad at saving. Historical data suggests Kiwis were in the black for the years 2009 to 2013, with a savings rate ranging from 0.9% to 2.36% at its peak. Using today’s disposable income, that means Kiwis were banking around $853 in 2011.

While they’re currently in the red, Kiwis are moving towards a positive savings rate, with gradual increases from -3.35 in 2017, to a forecasted rate of -1.23% in 2020.

Australia versus New Zealand

Australians are actually better savers than Kiwis, with an average savings rate of 2.16% in 2019 and a positive forecasted savings rate of 2.10% for 2020. While it might not seem like a lot, this amounts to NZD$1,046 per year. That means Aussies are stashing away NZD$1,490 more than Kiwis every year.

However, while Aussies are saving more than Kiwis, they’re also taking on more debt. Australia ranks fourth globally for the rate of household debt to disposable income, at a whopping 216.27%. New Zealand has a rate nearly half that at just 121.15%.

Tips for saving smarter

  1. Switch finance service providers

Changing banks, transferring credit cards or switching insurance providers may seem like more trouble than it’s worth but if you compare your options, you can potentially save hundreds of dollars every year with just a few minutes of work.

2. Cut down on guilty pleasures

We all love our guilty pleasures but when we’re trying to save, they should really be the first thing to go. Take a look at your bank statement and axe all the non-necessities from your budget.

3. Pick up a side hustle

If you can’t save more, try earning more. With so many gig-economy apps on the market, there’s never been a better time to earn extra cash. From dog walking to helping people move homes, there are plenty of ways to earn some cash on the side.

4. Pay yourself first

As soon as you receive your pay, set money aside for long-term saving goals or investments. That way you won’t be tempted to blow money sitting in your daily expense account. It can help to set up automatic transfers so you don’t even have to think about it.

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