A mobile budgeting clinic is to be launched in the Western Bay amid fears that the financial fallout from the coronavirus crisis could see household debt soar.

The news comes as Tauranga Budget Advisory Service revealed that last year its clients had a combined debt of $26 million and that was expected to climb higher as people grappled with job losses and financial hardship in the wake of Covid-19.

Manager Shirley McCombe fears some people will accumulate mountains of debt on credit and store cards if they are struggling to make ends meet. Others might ignore outstanding bills in the hope things would come right and they would find the money to pay them.

Earlier this week a report revealed the potential scale of the economic fallout from the coronavirus crisis - estimating the Bay of Plenty could lose $776m in earnings and almost 15,000 jobs by March next year.

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McCombe said those grappling with debt and burdened with money woes should seek help now.

''We would rather see people now and help them work through their situation than wait until they have committed to high-interest loans or had debts passed to debt collectors. It is such a huge comfort to people, when they are under so much stress, to know that there is help and we are only a phone call away.''

The budget advisory van hopes to be on the road when the lockdown is over. Photo / George Novak
The budget advisory van hopes to be on the road when the lockdown is over. Photo / George Novak

In 2019, the service dealt with about $26m in client debt and held 4500 one-on-one sessions as well as group education. McCombe said it was on par with the year before but some worrying trends had started to emerge.

The debt for accommodation, rent or board had skyrocketed to $963,686 from $268,852 in 2018 while debts of $50,000 to $100,000 were not uncommon.

These large debts were usually a combination of payday loans, credit cards, Work and Income recoverable debt, IRD, student debt and child maintenance, she said.

''Over the past two years we have seen an increase in clients who are in employment and we expect this to increase dramatically due to the impacts of Covid-19.''

But now funding from TECT and the Western Bay District Council would allow the service to provide extra help, including a mobile clinic.

TECT funding of $52,000 would be used to take on an additional financial mentor and lift the cap on its Total Money Management service, McCombe said.

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''This is a service we offer clients who need additional support to manage their finances. It is completely voluntary and clients redirect all or part of their income to an account we manage on their behalf.''

Meanwhile, the mobile clinic was all ready to go and $10,000 from the Western Bay Council meant the van could be used to increase community education.

Western Bay Council community manager David Pearce said the funding was to support the broadening of the Tauranga Budget Service out into the region.

''The mobile van will enable Western Bay residents to have the service come to them which will reduce travel barriers or time constraints.

''The van is well kitted out with seating and a table and tea and coffee facilities. This will help those needing assistance to relax when working with a budget adviser.''

TECT chairman Bill Holland. Photo / File
TECT chairman Bill Holland. Photo / File

TECT chairman Bill Holland said its grant had come out of its normal grants package.

He said the advisory service did an outstanding job.

''This is to top up their operational costs ... for some time now we have recognised that these not-for-profits need funding just to operate.

''The Budget Advisory Service has been around for a while and is doing a good job. And right now, of course, it's probably needed more so than ever.''


Need Help?
. Have you lost your job or your hours are reduced? Are you worried about paying your bills? Do you owe money and don't know what to do?
. Make a free and confidential appointment to met with a financial mentor face to face or by phone, email or Zoom
.Phone 07 578 0969, text 021 08177107 or email: admin@tgabudget.org.nz
. Clinic times at www.tgabudget.org.nz