How to beat the cost of living crisis by adapting your lifestyle

With four young children and two property businesses to run, it’s no surprise that former The Block NZ winners Alice and Caleb Pearson have had to learn to be organised. Planning ahead ensures family life runs smoothly, yet it goes further than that for the renovation pros, whose careful planning is also the key to their financial wellbeing.

“Financial security comes from managing your lifestyle, rather than just your money,” says Caleb. “Being organised and having a plan of what you might need financially in case you’re confronted with an unexpected big bill is a good place to start.”

Living within our means is something we all want, but with the high cost of living and pressures of consumerism, how do we make it a reality? Alice and Caleb, who are renovating their 12th home in Ōrewa, north of Auckland, say establishing clear priorities is a vital first step.

“Managing our money means we need to really look at what the priorities are for us as a family, and then make sure we're allocating our finances to those first,” says Alice. “For us, living within our means isn’t about budgets and allocation, it’s about creating an intentional lifestyle to not overspend, and to not consume whatever we want.”

Simple habits such as buying secondhand, pausing before purchasing to avoid impulse buys, and mapping out future spending can make a big difference.

The Pearsons also try to avoid what they call “a life of comparison”, instead making a conscious effort to be content with what they have.

“This whole concept of keeping up with the Joneses can often cause you to spend money on things that you don't actually need or even want, just to be on trend or to have what other people have,” says Caleb. “The practice of being content with what you actually have really helps cultivate a lifestyle where you're spending wisely.”

Sometimes, honest conversations with friends and family are needed, says Alice, who points out that everyone has different ways they like to socialise and spend their money. The couple – who are parents to Alek, seven, Mika, five, Blake, 20 months, and Brook, four months – would rather enjoy fish and chips at the beach than an expensive trip to the movies or a flash restaurant.

“You just need to be planned and be creative. Find what good bush walks are around or travel out to a beach or simply just play board games with friends. There are huge amounts of ways to spend quality time with the people that you love without actually spending money,” says Alice. “It’s about making sacrifices that you’re comfortable with.”

She lives by the phrase, “For everything you gain you need to lose something else, but for everything you lose, you’ll also gain something else.”

Ultimately, by being intentional with their spending – which sometimes means going without certain things – Alice and Caleb have gained the lifestyle they’ve always wanted. They’re not anxious about living beyond their means and are able to spend quality time with their children.

“This ability to be able to manage our money is a really important tool that gives us more options ultimately in the long run.”

The views expressed are those of the individual featured, speaking in their individual capacity and do not necessarily reflect or represent the views of State/IAG New Zealand. These advertisements do not offer specific advice and you are responsible for your own decisions about financial planning, investment and risk.  All information presented is of a general nature, merely for informational purposes and is not intended as a substitute for professional and/or financial advice. Should you decide to act upon any of the information presented, you do so at your own risk.