Struggle street on six-figure pay

Wellington woman Karina, who does not want her surname used, earns between $8000 and $10,000 a month. But she says if you think that makes her wealthy, think again. From that, she has to cover $715 a week in rent, debt repayments, before- and afterschool care for her two kids and all household bills.

She is a contractor so she gets no holiday pay or sick leave, and it is a struggle sometimes. ‘‘Especially when I need to save for the months when there are public holidays like at Christmas time. Basically, if I don’t work I don’t get paid. So I try to work as much as I can.’’

It was revealed this week that more higherincome families are seeking help with their finances and tens of thousands say it’s hard to make ends meet.

Karina said it was unfair to assume that someone earning six figures was doing well.

‘‘Everyone’s situation in life is different. My divorce meant I incurred half the debt. That’s not entirely my fault. But also, I rent a house so my kids can grow up in a nice, warm, safe place and that costs more, unfortunately.

‘‘I would never judge anyone on any income because some could be earning $50,000 and could have little outgoings and no debt and save more than I do. No one knows my history and shouldn’t judge what they don’t know.’’

Meanwhile, Karen is on less than $35,000, working part-time. She says she is doing well. Her mortgage is being paid faster than it has to be and she sent her kids to semi-private schools.

She is careful with her food shopping and only buys things on special. She does not have a car.

‘‘I know people that earn quite a bit of money … What happens is that the higher the income you have, the higher sense of security you feel. What comes with that – they feel they can go and spend and not have to worry about it. One day reality kicks in. It comes down to your spending habits.’’

While a salary of $100,000 might sound a lot, in some parts of the country it is barely enough to qualify for a mortgage on a median-priced house.

Nationwide, the median individual income is just under $50,000.

If a couple were able to get a loan while earning $100,000, their home loan repayment would be almost two-thirds of the roughly $6000 they had after tax each month.

A typical Auckland power bill is about $180 a month and they would also have to pay rates, insurance, travel expenses and for their food shopping. Nationwide, the average amount spent weekly on food is about $220 – or between $8000 and $1000 a month.

Once the mortgage and bills were paid, a $100,000-a-year couple would only have about $200 a week to cover their other expenses.