BNZ chief economist Tony Alexander has always been a bit of a loose cannon on the bank’s deck (and we say that with love and admiration). He’s known for being able to create a media-friendly headline and say what he really thinks. No surprises then, when he provoked a small storm last week after shooting from the hip in his weekly newsletter, telling young people to harden up and cut their expenses if they wanted to get on the property ladder.

You can read more about the controversy here (and for sure, there are bigger problems with the housing crisis than simply saving money) but in the meantime we thought we’d look at Tony’s recommendations for tightening our financial belts and see if they stack up.

Tony says
Start out in a desolate new suburb of clay soil far from work.
We reckon
Examine the area of this desolate piece of clay to see what its potential could be; is it the new Ponsonby, or will Ranui always be Ranui? And get out the calculator and do the maths: How much is it going to cost you to commute to work each day versus the gains you might get from buying smaller but closer to a city centre?

Tony says
Go to cafes and spend as much on lattes, muffins, frappes, wraps, etc. as often as the Baby Boomers did.
We reckon
Budget for the occasional treat but don’t let it become a habit. Buying your lunch every day, or a coffee every day, is a great way to burn through cash without feeling like you’ve had a treat. (Read up on our ‘Three Naughty Things’ rule blog for more on this idea.)

Tony says
Consume as much food beyond daily calorific requirements as they did.
We say
You calling us fat bro?

Tony says
Mend clothes instead of buying replacements like they did.
We reckon
We’re actually not that fashionable here at Credit Simple HQ (harsh but true), so we think Tony is bang on with this one. If you’re hankering for new rags, try the 30 Day Challenge: no shopping for 30 days and no wearing the same thing twice (except shoes). You’ll realise just how much you have, if you shop in your own closet.

Tony says
Take as many overseas holidays as they did.
We reckon
Holidays are cool and sometimes they make life worth living, but save for them, don’t put them on credit. If a holiday means a lot to you, make it a priority  –  but realise your home ownership dreams will be that little bit further away.

Tony says
Subscribe to the same number of TV channels as they received.
We say
Bro have you heard of Netflix? Nobody “subscribes” to “TV channels” any more. Cost: minimal. (Good point though; use the library instead of buying books, and YouTube is the gift that keeps on giving.)

Tony says
Drink the same limited range of domestically produced non-boutique beer and wine as they did, at home, at the local motor lodge or working men’s club.
We reckon
We’re not sold on the idea of a working men’s club, but a cheeky $6.99 cleanskin shared at home on your desolate clay soil with mates is the way forward.

Tony says
Hire as many feng shui consultants and cat whisperers as they did.
We say
Feng shui bro do you even.

The post BNZ chief economist Tony Alexander reckons we need to harden up. We check out his spending tips to see if they stack up appeared first on Credit Simple NZ.