Collaborations – Financial support agencies join forces to encourage safer spending this Christmas

The impact on people facing hardship due to the ongoing lockdown has financial support agencies banding together to drive home the message – spend safely in the lead up to Christmas.

National Strategy for Financial Capability partners Ngā Tāngata Microfinance, Good Shepherd NZ, Christians Against Poverty (CAP), FinCap and Te Ara Ahunga Ora Retirement Commission’s Sorted want to make sure those who need some extra financial help and advice know where to turn to.

A campaign promoting the services available of each of the agencies, along with safer ways to shop to avoid a ‘#buynowpainlater’ situation, kicks off this week, in the lead up to Black Friday sales and Christmas.

Ngā Tāngata Microfinance Chief Executive, Natalie Vincent says: “we are encouraging people to get help with their budget, plan safe spending over the holidays and avoid heading into the New Year with unmanageable debt. There is no wrong door to knock on for free support and advice, we are all here to help.”

Te Ara Ahunga Ora Retirement Director, Stakeholder Relations, Anika Forsman says COVID-19 has amplified the hardships many young people and overstretched families are facing.

“It’s making an already challenging situation worse, and as a result financial support agencies are in high demand for their services, but there’s still many who might not know help is available,” she says.

“Free support and advice is available to those who need it in the form of financial mentoring, interest free loans, budgeting advice, debt-help, links to foodbanks, and help navigating Work and Income processes and entitlements.

“It’s more important than ever to prevent the spiral into debt and poverty, and that’s why we are working together to help spread the word of what help is out there.”

The agencies are also noticing a concerning upward trend in their clients using Buy Now, Pay Later (BNPL) to cover everyday essentials such as meat and groceries.

BNPL has changed the lending landscape by increasing access to credit without the regulations of traditional lending.

FinCap’s financial mentors report clients have up to 13 separate BNPL payments owing at any one time. And insights gathered from Ngā Tāngata Microfinance in October reveal 35% of the people they are helping are using BNPL, with 26% saying they have missed a payment.

Te Ara Ahunga Ora’s own consumer research has seen BNPL usage go up for under 65s, from 18% in February to 24% in September. Among Māori aged under 65 years, BNPL has increased to a greater degree, 24% in February to 34% in September.

“BNPL can be a great option for those wanting to spread the costs of something, but debt can quickly add up if you have too many transactions, miss repayments, and get hit with late fees,” says Forsman.

“Christmas is coming, and after a challenging year it’s tempting to fall into a trap of overspending and using too many BNPL at once. If people are regularly using credit to make ends meet, then reach out to these amazing support agencies. Most people don’t think to get help until it’s too late.”

Christians Against Poverty (CAP) is a non-profit organisation, passionate about releasing New Zealanders from debt, poverty, and its causes.

CAP has been providing professional debt counselling in partnership with local churches since 2008. In that time, thousands of people have received the help and support needed to break free from unmanageable debt, and step into a life filled with freedom and hope. Also, in partnership with local churches, CAP runs community groups offering help with money management.

All CAP’s services are free, and available to anyone who needs help.

Ngā Tāngata Microfinance (NTM) is a small, non-profit organisation that aims to help break the cycle of financial stress by providing clients with access to safe, fair and affordable interest-free loans, as well as financial mentoring. Loans are backed by financial partner, Kiwibank, who, like NMT, is dedicated to helping Kiwis become better off. NTM offers two types of interest-free loans:

-GetControl debt relief loans of up to $3,000 to fully cover one or more high-interest loans

-GetAhead asset building loans of up to $2,000 to help build a family’s assets and improve their wellbeing.

FinCap provides financial mentors with all the resources they need to support clients safely and confidentially.

MoneyTalks helpline connects people and whānau with local foodbanks, helps them find their way through Work and Income processes and entitlements, and supporst people to manage their money. Anybody can get call the MoneyTalks team if they need help with day-to-day money matters like budgeting and debt management.

Good Shepherd NZ is a charitable non-government organisation that was established to address the critical, contemporary issues facing women, girls and families.

Good Shepherd offers fair and affordable ‘Good Loans’ (in partnership with BNZ and MSD) to purchase essential household goods and services. They have also added a COVID relief loan with flexible repayment terms and no fees or charges, for urgent costs such as rent, utility bills and debts for those people whose income has been impacted by Covid 19. Good Loans are not for cash.

Under the DEBTsolve programme, the client will also work with one of their debt coaches to create a plan for reducing, managing and getting on top of their debt, which may include a debt solution loan.

Sorted is a free service delivered by Te Ara Ahunga Ora, funded by the government, providing an array of online information from tackling debt, budgeting, saving and investing, handy guides and calculators for things like KiwiSaver and mortgages, to planning for retirement. Sorted also includes financial capability programmes for schools, workplaces and communities.