The struggle to pay off mounting personal debt has pushed close to 2000 Tauranga people to seek help paying off debts totalling more than $30 million.
Figures from the Tauranga Budget Advisory Service showed the total amount of personal debt clients had racked up in 2017 was $30.09m.
This was up from $20.8m of debt in 2016, an increase of $9.2m.
In 2015, the debt level was $22.2m.
Tauranga Budget Advisory Service manager Diane Bruin said about 1800 clients had used the service this year. Of those, the highest single debt she had seen was for $760,000, which came from a mortgagee sale of a property and ended in bankruptcy.
"This came about due to ill health, and being over-committed with personal loans and excessive use of credit cards up to their limit."
Bruin said clients were getting themselves into more debt and were using credit cards and personal loans to supplement the increase in the cost of living, with accommodation being the single highest increase in costs.
"The economy has improved, however, people are spending," she said.
"Credit is too easy to get with online services and, whilst it is provided on income now, anything can happen - loss of job, redundancy and health issues."
Bruin said bank debt was always where clients racked up the highest amount of debt, including mortgages, credit cards and finance cards.
Te Tuinga Whanau Support Services Trust director Tommy Wilson said their organisation dealt with people struggling with debt all the time.
"When people get to us, they've already reached the ceiling of their debt. It becomes the straw that breaks the camel's back."
Wilson said clients often had few possessions because they had sold their furnishings or cars to try to pay off debt.
He said there were many unscrupulous organisations and businesses which preyed on vulnerable people with "quick-fix budgeting" and huge interest rates, which only made their debt worse in the long run.
"It just compounds the problem. When they come to us, just about all of our clients have debt, and not just a little debt either."
He would like to see stricter paperwork when people signed up for quick loans.
Mark Lister, head of private wealth research at Craigs Investment Partners, said there was good debt and bad debt. The trick was recognising the difference.
"Debt can really work in your favour. It can be a great builder of wealth but it can also sharply work against you, especially when you are using debt for consumables.
"Good debt is when you invest in a house, or education or a business. That's a smart use of debt but I suspect there are a lot of people using debt for new cars or phones or simply to try to get themselves out of a difficult financial position. It can be a big downward spiral," he said.
Lister said New Zealanders were generally not financially sophisticated and many people were not taught financial literacy.
"A lot of people don't understand the implications of how debt can grow and grow."
Chamber of Commerce chief executive Stan Gregec said there was "no doubt" some people out there were struggling with debt, and the numbers seemed to be increasing.
"The high cost of accommodation and other expenses of living in Tauranga are not making it easy for many people," he said.
Gregec did not think the level of personal debt people carried would have a noticeable impact on Tauranga's economy but said individual cases could have a "devastating impact" on the people and businesses concerned.
Jigsaw Financial Solutions adviser Sharon Giblett said there were steps people could take to try to manage their debt.
"Ideally, don't take on debt in the first place, save first where possible... If you do take on debt, make sure you can afford it and are paying it off within the timeframe."
Budgeting for the future
Budgeting is a necessity for Tauranga newcomer Naomi Maderios, who is planning her future.
Maderios sold her paddle board business in the Coromandel in mid-October and moved to Tauranga to pursue her digital media career.
"Budgeting is important as I'm looking into my options of how to invest my money."
Maderios said she was doing a lot of research into the housing market and where she would want to eventually buy a house as she did not want to get into financial stress.
"You just assume with selling a business and having a bit of money it would be an easy process but you can never have enough savings to buy a property."
The 26-year-old said she had held off buying a lot of things she wanted or needed as she had to be careful to save for her future.
Maderios said she was doing around 30 hours of freelance work for the time being that covered her expenses and would help her savings continue to grow.
"After I've paid all of my bills, I generally put aside an amount of money that I can spend for the week and it's about not going over that."
By the numbers
Total amount of personal debt clients of the Tauranga Budgeting Advice Service
2015 - $22,260,855.00
2016 - $20,846,903.00
2017 - $30,093,704.00
Tips to manage personal debt
- Draw a line in the sand and stop taking on more debt
- Don't delay or procrastinate, take a positive step and seek professional assistance asap
- Write down what you owe, to whom, what interest rates you are being charged
- Use the www.sorted.org tools and resources to do a budget and see where you can make some changes
- Focus on one at a time and make extra payments, pay off the highest interest rate debt first
- Sell some things you don't need and pay back some debt
- See if a debt consolidation loan is an option
- If you have a mortgage, can you consolidate the debt into your mortgage, or restructure?
- Jigsaw Financial Solutions Limited