Diposkan oleh Pengetahuan dan Pengalaman on Sunday, May 4, 2008

Average family spends $15 a week more than they earn, wealthy families even more due to increased interest rates


A study by the website interest.co.nz has calculated that a family on an average wage paying an average mortgage is now spending $15 more a week than they are earning. An average household has two kids and an average family is wage is $72,000, with the average pay increase in the past four years being $8,600 - or 12% on a $72,000 income.Also the figures assume a family on $52k has after tax income increase of $9204, and a family on 92k a $6448 increase.

On 72k you get about the same amount of family assistance as the In Work Payment - about $3600 a year. On $36,000 - half that income - you get about $10,000 a year in WFF - without bracket creep. So I assume that "earning" include WFF payments, because if it doesn't, i.e. either means that those on lower incomes are saving more than those on higher incomes or spending way more then $15 per week more than they earn.

UPDATE It does. Bernard Hickey's blog compares families on three incomes ranging from $52,500 - $92,000. They all spend the same on petrol ($66 a week, up from $40 in 2004), and on food ($164 per week, up from $142).So petrol and food has gone up $48 per week for all income earners. Food hits equally.

The difference is in the mortgage. A family on a higher income has a higher mortgage. But even in 2004 families on 52k were was spending more than they were earning because they bought houses that were too expensive and were mortgaged to the hilt. Increased interest rates has just made that worse to the extent that even the average family on $72k now has a deficit.A family on $52k spends $208 on a $112k mortgage, ( up $60), a family on $92k, $400 on a $213k mortgage(up $116). For low income families with a mortgage, a reduction in interest rates would soften the wallet more than a measly Government tax cut.