Managing Expenses as a New Expat in New Zealand

New Zealand bills

Moving to New Zealand or any new country with a different currency brings up the question of how to think about money. Chances are that you are making a salary that is different than your home country and prices are different than your home country.

It is sometimes difficult to adjust to your new salary and cost of goods.  When we moved to New Zealand from the states, I found that frequently we were converting the costs of goods to USD and using that conversion to judge the “reasonableness” of the price. Unfortunately, that logic has many flaws since we are making a substantial difference in salary if you convert it back to USD.

I have talked to several expats, and many people take a different approach. Everyone that I spoke to took a 50%+ pay cut to come to New Zealand. A common theme was that if they wanted a purchase to seem cheaper or justify a purchase they would think in their home currency, not NZD. Below are a couple of mindsets that expats have.

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Temporary Stay Model

This mindset works best if you are moving to New Zealand for a set contract and do not plan on staying long term.

  • -Think of consumables like rent, cell phone, food, restaurants in NZD. These will seem more expensive, but it will be easier to budget with your new salary.
  • -If you are purchasing an item that you are not going to take with you when you leave New Zealand, think of it in NZD.
  • -If you are purchasing an item that you will take with you when you leave, then think of it as costing your home currency.
  • -Travel is the spend category that had the most number of different mindsets of the people that I talked to. The most common way to think about it was to think of flights and accommodations in the home currency and other travel expenses in NZD. The exception was working holiday visa holders who preferred to think of all travel expenses in NZD.

3+ Year Model with Only New Zealand Income

  • -All expenses in NZD once in New Zealand

3+ Year Model with New Zealand and Foreign Income

This model differs then the New Zealand only model because if you are earning money in a foreign currency, you frequently have expenses in the same currency.  It is more realistic to think of those expenses in the foreign currency since your foreign income will offset them.

  • -Think of the expenses in the currency they occur in
  • -Think of travel and expenses in currencies you don’t have an income in as being in NZD

There are a lot of ways to think of expenses once you have moved to New Zealand. The most important thing is to decide your strategy and keep to it. Our guide on opening a New Zealand bank account and transferring money can help in adjusting your finances to New Zealand.

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