How to protect yourself during the recession

New Zealand is officially in recession, after Stats NZ confirmed the economy had contracted for two consecutive quarters.

Gross domestic product previously fell 0.7% in the December 2022 quarter, and then, according to the most recent data, declined another 0.1% in the March 2023 quarter.

But the picture is not all doom and gloom. New Zealand's economy actually grew 2.9% over the year to March, due to strong growth in the first two quarters – 1.5% in the June 2022 quarter and 1.4% in the September 2022 quarter.

Also, the March quarter was impacted by a couple of one-off events – the initial impacts of Cyclones Hale and Gabrielle and teachers’ strikes.

Tips to make and save money

History suggests New Zealand will return to growth mode, given our economy has grown by an average of 2.9% per year since 1991, according to Stats NZ.

In the meantime, though, it might be prudent to take some of these measures to protect yourself during the recession:

• Look for ways to reduce unnecessary expenses. That may include eating out less, cancelling subscriptions you’re not using or holidaying locally instead of overseas.
• Consider opportunities to increase your income, such as getting an extra job, doing extra shifts or renting out a spare bedroom.
• Build an emergency buffer equivalent to at least three months of expenses, so if you get retrenched, you’ll have enough savings to tide you over until you find a new job.
• Take a look at your loan to see if you could refinance to a lower rate, so you can reduce your mortgage repayments.

I can give you advice about the refinancing process and manage your home loan application if you decide to switch banks. Reach out if you’d like to discuss your options.