The cost of living in New Zealand is up again. Did your pay go up 19%? Yeah, nah.
By KiwiBudget Team ·
"The cost of living in New Zealand is up again. Petrol? Up 19% in a year. Power? Up 9%. Did your pay go up 19%? Yeah, nah. If your money's gone before payday, it's not just you."
That's how our cost of living TikTok starts. This is the longer version: what the latest numbers actually say, how they stack up against pay, and a plan you can start on your next payday.
What went up, in plain words
Stats NZ's latest consumers price index came out on 22 October. Prices rose 3.7% in the 12 months to the September 2026 quarter. That's down a little from 4.1% in the year to June, but still above the Reserve Bank's target band of 1 to 3%.
Stats NZ named five main contributors over the year:
- Petrol, up 19.1%. The biggest single contributor, 17.5% of the whole annual rise. It eased 6.5% in the September quarter, but only after jumping 20.1% in the June quarter.
- Building new houses, up 3.2%.
- Electricity, up 9.3%.
- International airfares, up 12.5%.
- Council rates and payments, up 6.2%, on top of 8.8% the year before.
More than 85% of the Stats NZ basket went up in price. Transport, and housing with household utilities like power, made up about 2.4 of the 3.7 points between them. That's close to two thirds of the rise.
Why it hits harder than 3.7% sounds
The trouble is where the rise landed. Petrol, power and rates aren't optional. You still have to get to work, and the power bill still turns up. When the costs you can't skip go up, the money has to come from somewhere else in the week.
Petrol is the one you feel every week or two. MBIE's national average board price for 91 was $3.62 a litre in the week ending 18 October 2026, so a 50 litre tank costs about $181. Discounts take a little off, but it's still a lot to find each time.
So, did pay keep up?
Not even close to 19%, but petrol is the extreme case. The fair test is all prices against pay, over the same period.
The newest official pay figures are for the year to June 2026 (the September ones come out on 4 November). Over that year:
- Pay rates rose 2.0%, on Stats NZ's labour cost index.
- Average hourly earnings (ordinary time) rose 2.8%, to $44.62.
- Prices rose 4.1%.
So pay rates rose about half as fast as prices. That gap is why a pay rise can still leave you feeling behind.
Here's a plan you can start on your next payday. It's general information, not personal financial advice, so bend it to fit your own situation.
1. Must-pays first, the day pay lands
Before anything else, list what has to come out of this pay before the next one arrives: rent or mortgage, power, phone and internet, insurance, every debt repayment, rates if you pay them, and a realistic amount for petrol and groceries. Put each one against the pay that covers it. If you're paid every two weeks, our fortnightly guide shows how to split monthly bills across pays.
2. Work out what's left until payday
Take your pay, subtract the must-pays due before the next one, and what's left is yours for everything else. Divide it by the days until payday and you've got a daily number, which is far easier to stick to than a monthly total.
Example (made up): a $1,600 fortnightly pay with $1,180 of must-pays due before the next one leaves $420. With 14 days to go, that's $30 a day.
3. Build a small buffer, on purpose
A buffer is what stops a surprise bill turning into a credit card bill. Set up one automatic transfer to a separate account on payday, even a small one, so you never have to decide each time. Small and steady beats big and abandoned.
4. Petrol: budget the real number
- Use your bank statement, not your memory. Add up the last four weeks of fuel, divide by four, and that's your weekly petrol line. If it's gone up, choose on purpose where the extra comes from.
- Check prices before you fill, and combine short trips into one loop. Our petrol post covers the discounts that still work.
- Check the in-work tax credit. For families eligible for the full in-work tax credit, IRD has added a temporary $50 a week from 1 April 2026 to 31 March 2027, or until 91 stays under $3 a litre for four weeks in a row, whichever comes first. If you already get the credit, IRD says the increase is automatic.
5. Power: check the plan, then the habits
- Compare your plan. Powerswitch (not-for-profit, backed by Consumer NZ) and Billy (the Electricity Authority's publicly owned site) are both free. Powerswitch works from your address or a recent bill, and Billy from a recent bill or a few quick questions. Look at plans with cheaper off-peak power too.
- Heat the rooms you use. EECA says heating only the rooms you're in, closing doors to the rest and sealing draughts can save up to $350 a year.
- Watch the hot water. It's around a third of a household's energy bill. Cutting a shower from 15 minutes to 5 saves around 66c a shower, and a cold wash saves around 25c a load.
- On NZ Super or a main benefit? The Winter Energy Payment for 2026 ended on 1 October, so your October and November power bills arrive without it.
If the must-pays are bigger than the pay
That's not a budgeting failure. It's a gap, and there's free help for it. MoneyTalks is on 0800 345 123, or free text 4029. If you're behind on a loan or a bill, ask the lender about a hardship arrangement, and check what Work and Income can help with.
Why we're building KiwiBudget
We're building KiwiBudget in Invercargill. Our founder, Jack Ridder, worked in supermarkets for about five years and watched the cost of living change what people do at the checkout. As Jack wrote in his post about the RNZ interview: "When I started, I never saw anyone with a calculator out. Now it's common to see people adding up their trolley as they go, and some putting things back."
That's who we're building for.
How KiwiBudget helps
KiwiBudget is built around your payday, whether that's weekly, fortnightly or monthly. Setting up your budget follows the same order as the plan above: your pay, then rent, bills, insurance and every repayment, then the rest. The main number is what's safe to spend until your next pay, with the working shown. If your must-pays are more than your pay, it fits the budget to what you earn, shows what it trimmed, and points you to MoneyTalks, your lender's hardship arrangement and Work and Income. For debts, it shows roughly when each one will be paid off at your current repayment, and how much sooner and cheaper it clears if you budget extra towards it. On the Sync plan and up it connects read-only to your bank through Akahu; the Free plan works with manual entry and statement uploads. Prices are on the pricing page. KiwiBudget launches on 16 November 2026, on iPhone, Android and the web.
Quick answers
What is the inflation rate in New Zealand right now?
Prices rose 3.7% in the 12 months to the September 2026 quarter, Stats NZ said on 22 October 2026. That's down from 4.1% in the year to June 2026.
Why is the cost of living going up in NZ?
Petrol was the biggest driver, up 19.1% in the year to the September 2026 quarter. Building new houses, electricity, international airfares and council rates also pushed prices up.
Have wages kept up with inflation in NZ?
Not in the latest figures. In the year to June 2026, pay rates rose 2.0% and average hourly earnings 2.8%, while prices rose 4.1%. New wage figures come out on 4 November 2026.
Why has my power bill gone up?
The Electricity Authority found household and small business power prices rose 6.8% on average between 1 November 2025 and 30 June 2026, with higher lines charges the biggest driver. (Stats NZ's 9.3% for electricity is a different measure over a different period, the year to the September 2026 quarter.) Comparing your plan on Powerswitch or Billy is free.
If you'd like to see what's left until payday without doing the maths in your head, join the waitlist or create your KiwiBudget account before launch on 16 November 2026.