Step 1: Start with what you take home
Budget with your pay after PAYE, the ACC earners’ levy, KiwiSaver and any student loan, not your salary. On a $70,000 salary with 3.5% KiwiSaver, that’s about $1,021 a week. The PAYE calculator works out yours.
Add any regular payments you get, such as Working for Families or the Accommodation Supplement. Not sure what you’re entitled to? See help you might be missing.
Step 2: Pick weeks, fortnights or months
If you’re paid weekly and your rent is weekly, budget by the week. Just be careful when you mix them:
- Weekly to monthly: multiply by 52, then divide by 12. $600 a week of rent is $2,600 a month, not $2,400.
- Fortnightly to monthly: multiply by 26, then divide by 12.
- Yearly bills: car registration, a warrant of fitness, insurance and council rates. Divide each by 52 and put that much aside every week, so they’re not a shock.
Step 3: See where your money goes
Look back at one or two months of bank statements. Most banking apps sort spending into categories. Don’t judge it yet: just find out what you really spend on rent, groceries, power, petrol, subscriptions and takeaways.
Step 4: Split it 50/30/20
| Share | For | Examples |
|---|---|---|
| 50% | Needs: what you must pay | Rent or mortgage, groceries, power, transport, insurance, minimum debt payments |
| 30% | Wants: what makes life enjoyable | Eating out, streaming, holidays, hobbies |
| 20% | Saving and paying off debt faster | Emergency fund, extra KiwiSaver, extra loan payments |
| Part | Amount |
|---|---|
| Needs (50%): rent, power, food, transport | $510.62 |
| Wants (30%): eating out, hobbies, trips | $306.37 |
| Saving and debt (20%) | $204.25 |
| Take-home pay a week | $1,021.24 |
That's about $4,425 a month: a month is 52 ÷ 12 weeks, not 4. If your rent alone is over half your pay, start from what's left after it.
If the numbers don’t fit
In Auckland, Wellington or Queenstown, rent alone can take half your pay. Treat 50/30/20 as a guide, not a test:
- Try 60/20/20 if your needs are high, and keep saving something.
- Cut wants first. They’re the easiest to change, and subscriptions add up.
- Compare power, broadband and insurance each year. Powerswitch compares power plans for your address.
- Check what help you can get. Work and Income’s “check what you might get” tool covers help for people in work too.
- Save something, even 5%. The habit matters more than the amount at first.
Make it automatic
- Set an automatic payment to savings for the day after payday.
- Pay bills by direct debit so you’re never late, ideally from a separate bills account.
- Give yourself a set amount for spending each week, and check in once a month.
If you’re struggling, MoneyTalks (0800 345 123) offers free, confidential help and can connect you with a financial mentor. Try your own numbers in the budget calculator.