Debt can feel overwhelming. Whether it’s credit cards, personal loans, buy-now-pay-later services, or unexpected expenses, many New Zealanders experience financial pressure at some stage of life. The important thing to remember is that there are practical steps and support systems available to help you regain control.
By taking action early and accessing the right support, including working with a financial mentor and exploring responsible lending options like microfinance. It is possible to move from financial stress to stability.
- Start by Understanding Your Financial Situation
The first step in tackling debt is understanding exactly where you stand financially.
This means listing:
- All debts (credit cards, personal loans, buy-now-pay-later, etc.)
- Interest rates and repayment amounts
- Household income
- Essential living costs such as rent, food, and power
Having a clear picture of your finances helps identify what is manageable and what changes may be needed. Many people feel relief simply by seeing everything laid out clearly.
- Seek Support from a Financial Mentor
In New Zealand, free financial mentoring services are available to help people deal with money challenges.
A financial mentor works alongside individuals and whānau to:
- Create a realistic budget
- Develop a plan to reduce debt
- Negotiate with creditors
- Identify available support services or benefits
- Provide guidance and encouragement through the process
Financial mentors take a non-judgmental approach and focus on helping people regain control of their financial lives. They can also advocate on behalf of clients with lenders or debt collectors if repayments become unmanageable.
Importantly, these services are free and confidential, making them accessible to anyone experiencing financial hardship.
- Prioritise Essential Expenses
When debt becomes difficult to manage, it is important to prioritise essential costs first.
These include:
- Housing (rent or mortgage)
- Food
- Power and utilities
- Transport to work or school
A financial mentor can help create a financial plan of action that ensures essential needs are met while developing a strategy to deal with debts over time.
- Talk to Your Creditors Early
Ignoring debt rarely makes it go away. In many cases, creditors are willing to work with borrowers if communication happens early.
Options may include:
- Reduced repayment arrangements
- Temporary hardship relief
- Payment plans that match your income
Financial mentors can often assist by negotiating with creditors on your behalf, reducing stress and ensuring fair treatment.
- Consider Responsible Lending Options
For some households, debt problems arise because of unexpected expenses, such as replacing a fridge, fixing a car, or paying for essential household items.
In these situations, high-interest lenders can make the problem worse.
This is where responsible microfinance organisations like Ngā Tāngata Microfinance can help.
Ngā Tāngata Microfinance provides fair and affordable loans for essential items, such as household appliances, vehicles repairs, education and debt consolidation. A key feature of these loans is that borrowers also work alongside a financial mentor to build budgeting skills and long-term financial capability.
My Money Kete* is a practical toolkit with free tips and resources to help you learn how to reduce debt and get ahead with your money.
This combination of affordable finance and mentoring support helps people not only address immediate needs but also build a stronger financial future.
- Use Free National Support Services
If you are unsure where to start, New Zealand offers national services that connect people to financial support.
One example is MoneyTalks, a free helpline that connects callers with trained financial mentors who can provide guidance and referrals to local services.
These services are designed to ensure that no one has to face financial hardship alone.
- Focus on Long-Term Financial Wellbeing
Tackling debt is rarely an overnight process. It often requires patience, discipline, and support.
Small changes can make a big difference over time:
- Tracking spending
- Building an emergency fund
- Avoiding high-interest lending
- Developing a long-term financial plan
With the right support and tools, many New Zealanders successfully move from financial hardship to financial stability.
Final Thoughts
Debt can be stressful, but help is available. By reaching out to a financial mentor, understanding your financial situation, and exploring responsible options like microfinance through Ngā Tāngata Microfinance, it is possible to regain control and build a stronger financial future.
No matter where you are in your financial journey, taking the first step toward support can make all the difference.
