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Frugal? Modest? Luxe? Here’s earn to fund your lifestyle and What you need to be satisfied

Everyone’s definition of ‘comfortable’ is different. Esther Taunton calculates how much your version might cost.

Additional reporting by Virginia Fallon and Catherine Hubbard

‘‘Is $110,000 enough for a family of four to live comfortably in Auckland?’’ It was a simple question, posed this week on Reddit by an American engineer considering a shift to New Zealand with his young family. However, responses were anything but simple.

While once, not so long ago, the immediate answer would have been ‘‘absolutely’’, the more than 200 replies to our would-be immigrant showed opinion today is divided.

For every person who claimed $110,000 would be ample, another warned it was nowhere near enough. Many, many more pointed out it would ultimately come down to an individual’s definition of ‘‘comfortably’’.

The Sunday Star-Times crunched the numbers to find out how much you really need to earn to fund three different lifestyles in our biggest city, from frugal to luxe:

(Note: Calculations are for a family of two adults and two school age children, living in Auckland, with no debt. Each scenario allows for a 3% contribution to KiwiSaver and assumes the children attend a state school.

All other costs are based on data from Immigration New Zealand’s cost of living calculator.)

Frugal

Our frugal family lives simply, with few treats or entertainment. They’re happy to buy cheap and secondhand goods, and run a cheap car that travels around 8000 kilometres a year.

They rent a two-bedroom home in West Auckland for $500 a week, with the kids bunking in together, and spend $220 a week on food and another $25 on other necessities from the supermarket.

Other expenses – including clothing, medical costs, running and maintaining a vehicle, insurance, power and phone – come to $270 a week.

The family also puts $10 a week aside for Christmas and $50 a week into a ‘‘rainy day fund’’ for repairing or replacing major items, like the car or an appliance, and other unexpected expenses.

Another $40 a week is earmarked for entertainment.

They don’t plan to take a holiday.

That brings their total estimated spend to $1130 a week or $58,760 a year. To have that much cash in hand, they’d need to earn at least $79,000 a year before tax.

Modest

This family lives reasonably but without any real splashing of the cash. They enjoy some wine each week, and the odd takeaway meal. They rent a nice house in a good area and drive a good quality, secondhand car that travels around 16,000km each year.

Weekly rent for their threebedroom home is $700, and they spend $380 a week at the supermarket.

They’re a bit more free and easy with running heaters and buying new clothes, and also have medical insurance, bringing their other expenses to $380 a week.

They also squirrel away more than the frugal family, putting $30 a week towards a summer holiday, $20 a week towards Christmas and banking $75 a week for those inevitable mech

Luxe Nelson Campbell, Motueka

‘‘I’m retired. I was earning $114k and that was enough to save very comfortably. The KiwiSaver, that was the best thing ever. Before I came to New Zealand, in 1987, I earned £90k a year, which was $270k, so I took a big wage cut to get here. The wages in NZ are fairly poor. That’s why we can’t keep the people we need in the jobs that we need them in. To live comfortably, you would take the pension and add $10k to that. About $30k. I own my own home – rates are $4k a year, insurance is $2k, to run a car, about $8k. I spend about $10k a year of savings on top of the pension.’’ ‘‘That figure is an absolute joke. We are in the top tier of income earners, and we struggle with how things are at the moment. We have to watch every dollar we spend. If that figure was based on someone who was single, and they had no kids, then maybe they could get by.’’

anical breakdowns.

Their total estimated weekly spend is $1695 ($88,140 a year), which means they’d need to earn $126,500 a year before tax.

Our luxe family lives in a very nice house, in an above average area. They have two good cars, bought new and upgraded every few years. They eat nice food at home, enjoy meals out and a glass or two of wine with most evening meals.

They pay $1150 a week to rent

a four-bedroom home in Ponsonby, and their weekly supermarket bill is $500.

Their other expenses come to $525 a week, including $120 for clothing and $130 to run two cars.

They’re happy to spend $200 a week on entertainment and put $180 a week into their rainy day fund. Their Christmas kitty and holiday funds are also healthy, with weekly deposits of $50 and $100 respectively.

That brings their total weekly spend to an estimated $2725 ($141,700 a year), meaning they’d need to earn $213,500 before tax to fund their lifestyle.

Makerita Makapelu laughs at the mere mention of medical insurance; let alone the ability to spend hundreds of dollars a week on groceries.

‘‘Medical insurance? Come on. Poor people are trying to scrap together enough to eat. And $380 a week on groceries? That’s how much people get on benefits.’’

While the numbers of our frugal, modest and luxe families apply to those in Auckland, the team leader of Wesley Community Action says they’re a world away from what she sees in Cannons Creek, Porirua.

There, Makapelu works with mainly beneficiaries or the working poor: NZers on low wages and often not entitled to Government assistance. For them, allocating even the smallest amount of money for entertainment is impossible, as is putting aside any savings for car repairs, holidays or Christmas.

‘‘We’re forced to create our own sense of control where we can and support our families to do the same. Usually that’s about knuckling down on wants and needs. They have to live very basically.’’

She’s been in the role for 15 years and says the need in her community is growing. The idea that even a ‘‘frugal family’’ could pay for insurance is laughable.

‘‘That’s not our reality. It might be a reality somewhere but not where I am.’’

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en-nz

2022-08-07T07:00:00.0000000Z

2022-08-07T07:00:00.0000000Z

https://fairfaxmedia.pressreader.com/article/281749863121777

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