So, will it really be better?

ASB’s chief economist Nick Tuffley says there are many reasons to be optimistic it will be, including a further boost from lower interest rates.

“There are still more people to benefit from the declines,” he says. “That will help the cash flows of additional households, as will the slowing of inflation.”

While the unemployment rate has been rising, Mike Taylor, founder and chief investment officer of PIE Funds, says Kiwis can take heart from forward-looking indicators: “Recent jobs data from Seek in NZ shows five months of improvement – combined with the lower interest rates, this trend should see the economy pick up a little more.”

Enable.me financial coach Shelley Palman says, from what she’s seeing, we’re past the worst of the economic cycle.

“Which suggests that things can only improve from here,” she says. “It might not be a linear improvement, but we’re on our way!”

Our economy will also no doubt benefit from the strong export income for our food-producing sectors, and a large cash injection for Fonterra farmers – once the co-op’s sale of Mainland Group to Lactalis is complete – won’t hurt either.

We all know there are no guarantees though – so, what should you be keeping a wary eye on in 2026?

If you believe the indications currently being dished out by the financial markets, you can potentially expect the first hike in the Official Cash Rate next year – we’ve already seen longer-term fixed mortgage rates rise at most of the main banks.

Westpac’s chief economist Kelly Eckhold told me recently: “I’m thinking that the first [Official Cash] rate rise will happen at the end of next year, whereas the market pricing is thinking it could start perhaps as early as May.”

That said, a hike is not currently in the Reserve Bank’s forecasts until 2027 – we’ll get a fresh assessment in the Monetary Policy Statement from the new Reserve Bank Governor, Dr Anna Breman, in mid-February.

So, don’t panic – but it’s worth considering if you’re about to refix your mortgage.

Having potentially reached the lowest point of the interest rate cycle makes Palman’s advice particularly salient. “What we saw when interest rates were low over the Covid period is that people STILL did not make the progress they should, despite fantastic conditions. Don’t be the one to make that same mistake this time round”.

While it’s little reassurance, Taylor says the real “watch out” is probably the thing no one is watching. “It’s always the things that you least expect, and that nobody predicts, that are the most impactful,” he says. “On that basis, perhaps we can rule out the AI bubble theory [unless prices go a lot higher].”

Here’s hoping we can. The impact of an AI bubble bursting could be dire, as most investors – including those in KiwiSaver – have a lot riding on it. We need to see the trillions of dollars of investment (and the multi-trillion-dollar market capitalisations of the so-called Magnificent Seven) converting into many more trillions in revenue.

While tariffs didn’t end up being ruinous this year (thanks TACO!), ASB’s Nick Tuffley warns the world is changing in ways that make it more difficult for a small, open economy like ours.

“We are moving away from a rules-based world towards a ‘might is right’ environment, Tuffley says. ”The global economy and trade are more fragile and prone to disruption.”

Even if conditions do turn out to be better in 2026, you might be heading into the year feeling a bit, well, knackered. Worn down. Pessimistic, even. It has been several years of economic turmoil, after all.

So how do you dust yourself off and prepare to give 2026 your best, come what may?

Palman advises focusing on the basics and small wins: “Habits are more important than you think. Seeing and feeling progress, no matter how small, is key to keeping you motivated.”

Clinical psychologist Jacqui Maguire echoes that sentiment.

“Instead of asking ‘How do I make next year better?’, a more workable question is ‘What is one thing I can do well today, tomorrow and the day after that?’ Momentum is built through achievable everyday steps, not heroic overhauls,” Mguire says.

For some, it may be an overwhelming task as financial worries have consumed them. Financial mentor David Verry told me on The Prosperity Project Podcast that some clients are so distressed financially they’re suicidal – and if that’s you, it’s crucial you seek help.

“A lot of people keep it all inside them, and I guess that’s where we can be the safety valve, people can come and open up … you’re not alone,” Verry says.

Nothing magical will happen when the clock strikes midnight on December 31, but if you haven’t exactly thrived in 2025, it’s useful to put the year and all it wrought behind you and just have a rest. Surviving 2025 – I think – is an achievement in itself.

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