Kiwi families will need to come up with an additional $4000 on average by Christmas this year just to live the same as they did a year ago. That's on the back of a $3000 rise, on average, in the cost of living last year.

With rents, mortgages, food, fuel, power and other costs rising, many families are struggling to make ends meet or find discretionary spending that can be slashed.

The annual percentage change of the Consumer Price Index was sitting at 1.5 per cent in March 2021, but had risen to 5.9 per cent by December last year. The most recent figures have it sitting at a 30 year high, although the Reserve Bank expects that to drop back to around 5.5 per cent by Christmas.

Timaru couple June, 35, and Jarred, 36, Davies and their two children quit Netflix this year as part of a wider exercise to try and bring costs down for their family of four. They switched their internet from Spark to Sky, which meant they received a TV service they previously paid for, effectively for free, with Disney+ thrown in.

"Our monthly bill for internet plus Sky is less than what our Spark bill was just for internet," says June.

Jarred and June Davies on their wedding day in February 2016. The couple, from Timaru, are trying to find ways to cut costs. Photo / Supplied

Median household income in New Zealand is sitting at $117,774 according to economics forecaster Infometrics. Average household spending, minus savings, based on Statistics New Zealand's most recent figures corrected for inflation, was around $68,000 in 2019, rising to $69,000 after 1.71 per cent inflation in 2020 and again to $72,000 last year after 3.94 per cent inflation. But that will rise to about $76,000 by Christmas this year if inflation is sitting around 5.5 per cent, meaning an extra $4000 to find, to meet the same costs.

But every family is different and some are being affected more than others by cost increases in fixed expenses such as rent, mortgages, rates and childcare.

Mortgage repayments have doubled this year for some homeowners who have come off two-year fixed rates. According to CoreLogic's Nick Goodall, monthly payments will have increased by $150.42 per month for every $100,000 in debt on a 30 year mortgage term.

"For the average first home buyer loan size at origination of almost $600,000 back in December 2021, that's an increase of $902.51 per month on mortgage payments," says Goodall. Rents have risen significantly less.

While some families can choose to spend less in certain areas, it's not always possible. The Davies, for example, have been particularly hard hit by rates and power increases. They survive on one income, but stay-at-home-mum June is looking for part-time work.

There's some good news there. Hourly wages are rising, with median weekly earnings up 8.8 per cent in the year to June, according to Statistics New Zealand - the biggest rise since records began 24 years ago.

Infometrics chief forecaster Gareth Kiernan says although employees such as nurses may not be able to get pay rises in their existing roles, many are looking for new jobs that pay better. Likewise employers know that even minimum wage workers can leave for a better paying job and some are finding their pay increasing.

But even with wages rising, the cost of living keeps going up too.

Asta Davies, aged 22 months, and Jackson Davies aged 12, of Timaru, don't have Netflix anymore - but do have Disney+.

"My husband works 40 hours a week at a local bakery," says June. "We are lucky to only just make ends meet. In fact we sometimes get behind on our important bills like power and even our rates bill is super high at the moment and we are having to find ways to try and pay it."

The Davies' daughter Asta, 22 months, can't eat dairy, soy or eggs, which pushes the cost of groceries up. The couple qualifies for a Child Disability Allowance of $105 a fortnight. But that still doesn't make it easy, says June.

Almond milk, nappies, wipes, cleaning products, meat and many other basics for the family have risen sharply in price this year.

And so treats for her dairy-free daughter and son Jackson, 12 - such as coconut yoghurt at $5.90 for 400g - are simply out of the family's reach, says June.

- Diana Clement, NZ Herald