Budgeting Assistance and Low Income Families: Changes in Income and Expenditure

Anthony G Wilson, Ruth M Houghton, Rachel K Piper

The New Zealand Federation of Family Budgeting Services Incorporated (NZFFBS) and its affiliates are important providers of social services in New Zealand. Their work helps a large number of clients, most of whom are social welfare beneficiaries.

This paper examines the impact of budgeting advice on low-income families’ patterns of  income, expenditure and indebtedness, and the extent to which budget advice has helped clients to live within a balanced budget. It is based on a study of 358 clients of the NZFFBS undertaken by the University of Otago Consulting Group in 1994.

The results show that: (1) after receiving budget advice the average weekly income of both beneficiary and wage earner clients rose; (2) expenditure changes after budget advice showed a decrease in all categories; (3) on average, clients moved from a weekly deficit to a weekly surplus after budget advice; and (4) a substantial proportion of the change in clients’ surpluses/deficits could be attributed to increased income rather than decreased expenditure.

The paper concludes that for the majority of clients, budget advice has improved their financial situations by moving them from a situation of weekly deficit to break-even or surplus by giving them an increased understanding of their weekly income and expenditure.