New data from Kiwibank’s 2026 State of Savings Index landed this week, and one number stands out: a quarter of New Zealanders don’t have enough set aside to cover an unexpected $500 bill.
Not a holiday, not a new car – a $500 bill.
A broken washing machine. A trip to the dentist. A car that won’t start.
If that number stings a bit, you’re not alone. And the reasons behind it aren’t about bad money habits – they’re about a cost of living that’s outpacing what most households bring in.
What the survey found
The Kiwibank index surveyed New Zealanders nationwide in June 2026, and the picture it paints is one a lot of families will recognise:
- 40% have borrowed money in the past year just to cover everyday living costs — not big purchases, just groceries, power, petrol.
- Buy Now, Pay Later is the most common way people are doing it, used by 19% of those surveyed, ahead of borrowing from family or friends (12%).
- 61% say they’re struggling to save, and nearly three-quarters point to the cost of living as the single biggest barrier.
- Renters, younger New Zealanders, Māori and Pacific families were significantly more likely to have taken on debt to get by.
There’s a silver lining buried in there too: 44% of people said they save regularly, a small but real improvement of 1% on last year.
So this isn’t a story about people not trying.
Why BNPL is filling the gap
Buy Now, Pay Later schemes were built for splitting the cost of a new pair of shoes or an appliance.
Using them to smooth out grocery bills or power costs is a different thing entirely – it’s short-term borrowing to cover essentials (which should be part of people’s regular budgeted expenses), and it’s easy to end up juggling several instalment plans at once without ever feeling like you’ve “borrowed” anything.
That’s not a judgement. When the alternative is going without, BNPL can feel like the only option in the moment.
But it works best if you’re disciplined – and starts working against you the moment it becomes a habit for essentials rather than a one-off tool.
The real fix isn’t a bigger emergency fund – it’s a smaller one
Most money advice says you need three to six months of expenses saved – even I recommend it! But, for a lot of families right now, that number is so far out of reach, that people say “bugger it” and don’t start at all.
Here’s a more realistic target: $500. Just enough to cover the one bill that would otherwise end up on a credit card or a BNPL plan.
A few ways to get there without overhauling your whole budget:
- Open a separate account and automate something small. Even $10 a week gets you to $500 in a year. $20 a week gets you there in six months. The amount matters less than the habit of it moving automatically, before you see it.
- Redirect one thing you’d barely notice. A subscription you forgot you had, a round of coffees, the “just in case” extra grocery items. You don’t need a full budget overhaul – one redirected expense is enough to start.
- Bank windfalls instead of absorbing them. Tax refund, Working for Families back-payment, a birthday gift of cash – instead of letting it disappear into everyday spending, move it straight into the buffer account.
- Treat the $500 as untouchable until it’s genuinely urgent. The point of this fund isn’t flexibility – it’s that it only exists for the thing that would otherwise become debt.
- If you’re already using BNPL for essentials, that’s the signal to start the buffer, not a reason to feel behind. The two aren’t in competition. Start the fund at whatever size you can, even if you’re still catching up elsewhere.
The bottom line
A quarter of New Zealand families are one surprise bill away from debt, and BNPL has become the emergency fund a lot of households don’t have.
That’s what happens when living costs rise faster than pay packets. But a $500 buffer, built slowly and automatically, is a realistic way to take back a bit of that ground, one small bill at a time.
Source: Kiwibank 2026 State of Savings Index, based on a nationwide survey conducted by Talbot Mills Research, 15–21 June 2026.
You might like to read this next: How to Start an Emergency Fund: A Complete Guide
