Citizens Advice Bureau – Keeping debt under control

With the cost of living rising, many households are feeling the squeeze. While borrowing can sometimes feel like the only option, taking on debt without a clear plan can quickly lead to financial stress.

Under New Zealand’s Credit Contracts and Consumer Finance Act (CCCFA), lenders must check that a person can afford to repay a loan before approving it. But the responsibility doesn’t end there – managing debt wisely starts with you. Here’s some practical tips:

• Think before you buy
Before signing up for credit or taking out a loan, pause and ask yourself – do I really need this right now? If the purchase isn’t urgent, consider saving up instead. Avoiding debt altogether is always the safest option.

• Create a budget
A clear budget helps you understand what you can afford and where your money is going. Free tools are available through MoneyTalks and Sorted, which offer budget planners and practical advice. If you’d prefer personal support, local budgeting services provide free, confidential help to get you back on track and find ways to reduce spending or increase income.

• Build an emergency fund
Unexpected expenses such as car repairs or medical bills often lead people to borrow. Setting aside even a small emergency fund can prevent this. While building savings, make sure you continue meeting at least the minimum repayments on existing debts.

• Stay on top of repayments
Once you have debt, paying on time is crucial. Missed payments mean extra fees and interest, making your total debt grow. If you have multiple debts, aim to pay at least the minimum on each. If you can afford to pay more, you’ll clear the debt faster and reduce interest costs.

• Managing credit cards
Credit cards can be particularly expensive. Try to pay more than the minimum each month – ideally the full balance. Keeping your credit limit lower can also stop you from spending more than you can repay. It may be worth researching other card options with lower fees or interest rates.

• Is debt consolidation right for you?
If you’re juggling several debts, consolidating them into one loan can simplify repayments. These loans often have lower interest rates but are spread over a longer time, meaning you could pay more overall. Consolidation only works if you avoid taking on new debt.

Another option may be extending your mortgage to cover other debts, but this should be discussed carefully with your lender to avoid increasing long-term costs.

If you’re struggling or unsure where to start, your local Citizens Advice Bureau can help. Free advice and early action can make all the difference in keeping debt from spiralling out of control.

How to contact us
Wellsford, Community Centre,
1 Matheson Road, Wellsford
Hours: Mon, 10am-2pm – phone & email only; open Tues-Fri, 10am-2pm – walk-in, phone & email
Warkworth, Library Building, Baxter Street, Warkworth
Hours: Every Tues & Fri, 10am-2pm – walk-in. Call: 09 423 7333 (leave a message if we’re unavailable)
Email: wellsford@cab.org.nz or warkworth@cab.org.nz
Website: www.cab.org.nz