At 75 years of age, Alison has had many years’ experience of living on a tight budget, and it’s only been recently that she has needed to reach out for help. “The cost of living is so high at the moment,” she says. “I’ve raised a family as a solo parent on next to nothing, but it’s never been harder to make ends meet.”
Alison rents her home in Tauranga, and her pension is her sole source of income. After paying rent, utilities, running her car and food, she has little money left. “I live a very simple, frugal life – there is nothing left for extras or little luxuries.”
Alison has never had a high income, so she has always been good at managing her money. A few years ago, she got a credit card with a limit of $10,000 and over time, the balance grew to around $5,000. “I was paying it down bit by bit, but I could see that with the cost of living increasing in New Zealand, I wasn’t going to be able to pay it off and have enough left to live off,” she explains.
With the help of a Financial Mentor from Budget House in Taupō, Alison re-did her budget. At that point her Financial Mentor suggested she apply for a GetControl Debt Relief Loan from Ngā Tāngata Microfinance to pay down the credit card. Her application was accepted, and she says it has changed her life. “A huge weight has been lifted off my shoulders,” says Alison. “I’m now only paying off the Ngā Tāngata Microfinance loan. Because it has zero fees and zero interest, I can see the debt balance reducing and, once again, I’m able to make ends meet.”
Alison has a large vegetable garden which supplies most of her food. “Forget about meat – it’s too expensive,” she says. “I’ve always had a veggie garden and it’s saved me so much money over the years.”
Another budgeting trick Alison has learnt is to set up automatic payments for all the expenses she has during the year. “I have seven APs which are paid every month to cover upcoming expenses. For example, an AP goes to her mechanic every month, so she has a credit when the car is due for its warrant and service at the end of the year.”
Alison does the same with her GP, electricity, insurance and other bills (although we recommend only doing this with companies you trust). “It makes such a difference and means these expenses are paid for before I incur the cost.” She says this approach to managing her money, the NTM loan and her veggie garden have kept her afloat.
“Some elderly people are literally starving because they can’t afford to live. I’m one of the lucky ones.”
Note: Any re-publishing of these case studies needs the permission of Ngā Tāngata Microfinance Trust.