How do I adjust for cost of living and home loan interest rate increases?

Life’s financial journey can sometimes take unexpected turns, leading to tight budget situations. Whether it’s due to changes in your income, shifts in your lifestyle or adjustments in interest rates, staying calm and taking proactive steps can help you navigate these challenges effectively. Here are some practical tips to guide you through:

1. Maintain inner peace:

In challenging times, maintaining inner peace is paramount. Keeping a clear mind allows you to make well-informed decisions and approach problems logically, minimising stress and preventing hasty choices that may lead to unnecessary problems.

2. Review and create a budget:

Regardless of your situation, a budget is your compass. Evaluate your financial landscape by reviewing or creating a budget. This process will provide a comprehensive view of your current financial standing, enabling you to identify unnecessary expenses that can be trimmed down.

3. Explore income and expense gap solutions:

Ask yourself strategic questions to bridge the income and expense gap:

• Can I trim optional expenses? Identify discretionary expenses and consider cutting ties with providers or subscriptions that are non-essential.
• Can I tap into emergency funds? Assess the sustainability of your emergency funds based on your budget. If feasible, reduce optional expenses temporarily until your financial situation stabilizes.
• Can I boost income? Explore avenues to increase your income, such as a side hustle. See if you can develop a plan to embark on new income-generating opportunities.
• Can I leverage support? Research available resources to secure additional income. For instance, you could investigate options like Kiwisaver Financial Hardship withdrawal to see if you meet the criteria.
• Collaborate with lenders and advisors: Don’t hesitate to reach out to your lender and financial advisor. They have specialised knowledge and are equipped to assist you in devising a tailored survival plan. Leading lenders offer dedicated financial hardship resources and teams to support you.

Facing financial challenges head-on is a test of your resilience. Remember, a well-structured plan and a proactive approach can pave the way for a smoother financial journey. You’re not alone – there’s support available to guide you through every step and help you build a more secure future.

For more information or personalised guidance, feel free to connect Achiva. We’re here to help you every step of the way.