Money Month - Part 2

A Q&A with Christine Liggins from Debtfix

If you’ve read our last blog, you will have seen mentions of Debtfix, an awesome not-for-profit providing judgement-free debt support for all Kiwis. We’ve been lucky enough to chat with the wonderful Christine Liggins, co-founder of Debtfix, who has some sweet tips on how to manage the burden of debt.

What is Debtfix, and what resources and support can it offer Kiwis?

Debtfix is a hardship and debt solution charity working with all budget services across the motu and assists clients who have complex debt issues. We have a lot of information on the website about debt and debt solutions. This is a good place for people to see what debt solutions might be suitable for them.

It looks like I’m going to need to go into debt. Are the easy options (overdrafts or credit cards) my best options, or are there better choices?

Why do you feel this way? What is happening? Is it due to a loss of job, a change in hours, or a change in circumstance? You can contact your creditors and they can work through this under their hardship provision.

Is it because you need something material - a new car, new computer, new washing machine or something similar?

Always check the terms of new credit facilities (aka. a type of loan), and ensure the payments are affordable and the terms are reasonable. If it is a short-term blip, then maybe an arranged overdraft is okay. Keep it small and manageable - or use a credit card, but make sure you clear the balance as quickly as you can.

What are some signs that my debts have gotten beyond my control?

How many debts have you got? More than 2 or 3 makes it quicker and easier to lose control.

How are you feeling - are you panicky and stressed about money each week? That's a good sign your debts could be spiralling out of control. And that is the perfect time to reach out and get some support.

What should I do if I can’t repay my debts? Is completely cutting my spending, or even bankruptcy, the only way out?

Bankruptcy - don’t even consider that! There are many other options first before this needs to be a consideration. Speak with your creditors, let them know, and see what assistance they can offer.

See a financial mentor in your local budget service - it's free, and they will have a clearer head than you in these circumstances.

Consider a debt solution to bring everything back under control to make things manageable again.

I’m too embarrassed to ask for help. Will I be judged on my financial situation? Will I ever get out of debt?

Firstly, all financial mentors are non-judgemental. We understand that life happens and can knock you off track now and again, and we will listen to what has happened and help you find a way to get back on the right path. You will only get out of debt if you stop taking on more. We are here to help you on your journey to being debt-free.

What do I need to know before I borrow?

The first question is - do you need this ‘thing’ that you are borrowing money for? Secondly - can you afford it?

Do a budget and ensure everything from your bank statements is included. This will not only show how much you can afford, but it will also show you where all your dollars are going, which will then make it easier for you to see if you are wasting money anywhere, and then you can redirect it to where you want it to go.

In what ways do you find that Kiwis easily fall into debt, even if it was unintentional? What are the debt traps to look out for?

"Buy Now, Pay Later" is a huge debt trap that many fall into. You get a glimmer of the newest "thing" and hey presto, you just pay a small amount now to take it home, without thinking whether you can afford the future payments. These payments are usually small but have a knock-on effect on our other costs. And what if your car breaks down the next day?

Before we borrow we should step back and consider the effect it will have on our tomorrow.

What are your top tips for managing your finances and staying on top of your debt?

Set up affordable payments for regular bills so that you don’t have to worry about them.

I want to get more financially responsible this Money Month, but it feels overwhelming. Where should I start first?

• Make sure you know where each dollar is going - do a budget.
• Start small - just starting can be the hardest part.
• Check your bills. Can you make these cheaper?
• Review your insurance, power, broadband, and phone plans - is there a better plan for you or your household?
• Before you borrow anything, step back, and consider the effects on your tomorrow.
• The MoneyTalks website will help you find a local budget service.

We want to give a huge shoutout to Christine and the team at Debtfix for bringing you this awesome content! To read more about Debtfix, head on over to their website to see the great things they do to support Kiwis in their quest to become debt-free.

If you have the PaySauce mobile app and you want to support Debtfix and its cause, check them out on our Payroll Giving platform, where you can donate a chosen amount directly through the app, straight out of your pay! This can be done as a one-off or recurring amount.

PayNow - Access earned wages without waiting for payday

Did you know that there is a way that PaySauce can help you from falling into debt with pesky payday lenders?

PayNow is a unique feature in the PaySauce app that lets employees access the money they’ve already earned, effectively letting them choose their own payday on demand. Supported by our partner BNZ, PayNow is not a loan, so there are no borrowing fees or interest, and there’s no danger of creating more debt.

Imagine this. You’ve done a few days' worth of work, but haven’t been paid yet. You’ve already earned a chunk of cash for the hours you’ve worked since your last payday and something unexpected crops up. Your teeth hurt, your car breaks down, or your dog needs a trip to the vet. Wouldn’t it be nice to have your money available to you, on your time?

Lucky for you, we thought about that too! Our PayNow feature, available on PaySauce standard and premium plans, helps employees collect the money they’ve earned when they need it. PayNow lets employees choose their own payday on demand. They can access your available earnings, and it’ll show the amount that they’ve earned since their last payday. Then they can choose an amount to request, and get paid - usually within an hour!

When payday comes around, the employer will process payroll as usual, less the amount the employee has already received; the rest goes to your employee! You can learn more about PayNow and how it works here.

We’re not through just yet, so stay tuned as we talk you through some tips on how to successfully create a budget so you can take control and make your money work for you!