People should work out what today's budget means for them before making any financial decisions, says Retirement Commissioner Diana Crossan.
Tax cuts meant income earners would have more in their pockets but the GST increase to 15 percent would also increase the cost of living.
"There's also the prospect of rental increases because of changes to property investment rules and if you are using child care you might eventually be paying more each week," said Ms Crossan.
"You need to carefully consider the overall impact on your finances so that you can make considered decisions about your spending and savings."
Ms Crossan said now was a good time for people to review their personal budgets.
"If you have more money each week, think carefully about how to get the best from it. Think about paying off high interest debt, or more towards your mortgage," she said.
"If you are in a position to save, even a small amount can make a significant difference to overall wealth in the long term.
"An added incentive for people with KiwiSaver funds, or other portfolio investment entities (PIES) is the reduction in tax rates which means long term savers will be able to save more for their retirement."
Ms Crossan said people who were concerned about the impact of the GST increase should look carefully at their spending and work out where savings might be made.
