Making ends meet – choices and tradeoffs

Financial strain influences the choices families make. This is not just about whether to buy something that might be good to have but not essential - it also sometimes means prioritising essential items and deciding what not to pay for.

The Dargaville group wondered whether the financial strain involved in raising children may cause people to limit the number of children they have or choose to remain childless. They discussed just how much must be given up in order to raise children.

‘As parents we accept a level of sacrifice for our children but what most of us question is what degree is fair? Should we be giving up the big night out on a Friday, or should we be cutting costs on our dentist bills or doctors fees. Most of us thought that we as mothers are often the first to lose something, i.e. a new pair of shoes’. (Dargaville group feedback)

In Grey Lynn the young parents talked about running out of money completely and having to borrow from relatives or friends.

"When we are low on cash after the bills and nappies we have to ask my mate if I can borrow money which sometimes is embarrassing” (17 year old with 10 month daughter)

“I get the DPB but most of the time I get help from my dad and sometimes I borrow money off my friend (20 year old mother with 9 month daughter)

Their choices were limited because of their low income.“I work full time and my mum looks after my baby, but I still don’t have enough to move out of home and be independent” (18 year old mother with 7 month daughter)

The Grey Lynn group prioritised expenses in the following order:

1. rent
2. children’s needs (nappies, formula, medicine)
3. bills (power, water, phone, hire purchase, loans
4. groceries

All four groups agreed that they put their children first and themselves last - they do not skimp on food for their children. Taking children to the doctor was a priority for everyone.

‘We don’t think twice about taking our children to the doctors. Small children are free so great support from the government thanks!’ (Royal Oak)

However it was a different story when a parent needed to go to the doctor. Parents commented that they certainly think twice about this, not just because of the high cost but because of being too busy. Going to the dentist was much the same. Parents were glad that children could go to the dentist free but put off going themselves. In Dargaville ‘Someone hadn’t been for 10 years and was only now going under ACC’.

‘We save up sickness till one essential appointment. We don’t visit the dentist unless there is pain or a visible need. We don’t ‘check up’ our health, we only go if there is a visible problem’ (Dargaville group feedback)

The cost of housing was a key reason for tradeoffs mentioned by Royal Oak participants. One of these tradeoffs was the option of moving out of Auckland to get a house of equivalent standard at considerably less cost. Some mentioned friends who lived elsewhere (e.g. Christchurch) and were able to both own a house and have ‘one full time stay at home parent’ because they did not have to service a high mortgage. This was a far less likely possibility in Auckland, it was felt, where working long hours was necessary to meet accommodation costs. Someone at Royal Oak mentioned a situation where:

‘Dad is working full time and Mum worked part time when the babies were under three months then went back to work full time (able to take the babies to work with her until they were six months old). Then the children went into home based care full time’.

The Dargaville group noted that simply having children involved a trade-off for women. They felt that women give up income in order to have children and continue to ‘give up aspects of their lives’ and make sacrifices to put their children first. They talked about what they would buy if they had spare money. While they would first ensure that their children had ‘extras’ such as tuition, they dreamt of being able to buy ‘something special, something luxurious’ for themselves as well - currently out of the question.

‘Most of us mums noted that we had lost most in the family. Often the husbands and partners still had outdoor pursuits but we had lost our time, our figures, our lives! Many of us noted that every dollar earned had to be spent with thought. We couldn’t do spontaneous spending’ (Dargaville group feedback)

For all groups, saving for retirement was a much lower priority than making ends meet today.

‘Hardly any of the group had joined KiwiSaver as they needed all available money now. However several commented that they didn’t know enough about it to make an informed decision, and they wanted it explained to them at a more personal level and were open to having that happen. They suggested that KiwiSaver could send spokespeople into the workplace. Two parents shared that they were already involved in retirement savings schemes prior to having children, and that the money taken out of their pay was not noticed or taken into account as they already had been doing it so long that it wasn’t a factor in their “mortgage budget” since having children and owning a house. (One parent was involved in the Teachers Retirement Savings scheme)’ (Royal Oak group feedback)

The following list includes strategies discussed by groups for managing the balancing act involved in making ends meet. It shows that the reasons behind these strategies are not only financial.

• Shop at cheaper grocery stores and buy the cheaper brands
• Raise vege gardens
• Borrow books, toys, car seats, clothes
• Give up smoking, drinking, nights out
• Clothe children in hand-me-downs or buy second hand
• Don’t go out (too expensive - also hard to organise). Going out for a meal is costly for a whole family. Cheap entertainment options mentioned include hiring DVDs online rather than going out to movies.
• Don’t travel or even visit as often for several reasons:
  • Expensive (petrol, accommodation)
  • Logistics and organisation
  • Choosing to spend time resting instead due to busy workload
  • Packing the car (so much stuff for children is required but one parent with three children has reduced the amount packed, e.g. less toys)
    ‘Participants commented that they required a bigger car to cater for children and equipment but couldn’t afford to upgrade’.
• Limit medical expenses by shopping around for the cheapest doctor or using a free accident and emergency clinic.

Groups noted that making ends meet can have some positive spin offs, such as finding low cost or no cost leisure activities where the family and children are involved together (e.g. trips to parks or playgrounds, using concession tickets for the zoo or Kelly Tarltons, going to the library, Mainly Music or church playgroups). Participants agreed that young children are happy to spend time with their families doing something that costs nothing, like playing in the park, which could also be good exercise and interesting.

‘They were looking to activities that involved the whole family so it made it cost effective plus healthy to go on bike rides and explore the local and wider environment.’ (Royal Oak group feedback)