Can you save on $18.50 an hour?
Some people say anyone can save, no matter how low their income, and others argue that incomes are so low that many struggle to live within theirs, let alone save anything.
Intrigued by this, I've done a little research on how my own situation would fare if I changed my location.
Say I got the job I want for $18.50 per hour (fulltime permanent) in an office in Dunedin, I live in a furnished three-bedroom flat there, and my rent was $165 per week . . .
Here's the maths:
Income: $740 per week minus deductions - $113.23 PAYE, $44.76 student loan deductions, $59.20 into Kiwisaver - would give a net pay of $522.81. Take off rent, power, food and fuel (all essentials), and I could easily save $100 a week and still have money left over - $142.81, to be exact. Nice, eh?
Change my location to Nelson. There is a furnished three-bedroom place in Washington Valley going for $120 each per week. I know nothing about Nelson and just chose this place because it's three beds and furnished.
My disposable income goes up by $45 per week. Now I can save, say, $150 per week. Perhaps. There may be variables which I am not aware of.
Go to Auckland, where it's all happening. There's a similar place in Parnell, which I chose because I'd heard of the suburb. Rent is now $267 per week each. After all my other deductions and still saving $100 per week, what I have left is $40.81.
I've never lived in Auckland, but perhaps I should be aware that fuel is likely to go up, depending on where the job is. There may be other costs as well that I have not factored in.
On the other hand, the income may also go up.
I might get up to $25 per hour for a similar job. It might then be worth moving from Dunedin for an extra $30-odd at the end of the week (unless more fuel factors in).
I'm not going to, because I like being close to family, but ... well, I can't see a single reason why I would.
Other people are different, of course.
More than one million people live in Auckland and I suppose they like it.
The question is: Can people save? At $18.50 per hour, I need at least 25 hours a week to have money in the hand at the end of the week. I can't save much except with Kiwisaver, either. At 40 hours per week, on the minimum wage, I could survive reasonably well.
But I don't have children, or a partner, and I can live in one room. How many people are in my circumstances?
I venture to suggest not too many.