Martine Rolls: Debt? Don't go there!

My eldest son wants an iPad and his younger brother has his mind set on a drum kit.

The rule in my house is simple. If you want something that costs a lot, you either help mum with lots of jobs to make a few dollars here and there and save up for it, or you wait until your birthday or Christmas and you might get lucky.

"Look mum, we can get a Samsung Galaxy Tab 2 for only $10.75 a week," said my big boy after discovering a flyer advertising fancy household goods, the latest technology and other luxury items. A cash price of $699 was listed for the tablet too.

"Read the small letters underneath, mate. Then tell me how many weeks we'd have to pay until we can keep it. We'll add it up and see if it makes sense," I said.

He told me it was 36 months, so I let him figure it all out for himself with a calculator. He discovered that the total cost would be around $1546. His only reply was: "That's crazy!"

If a 9-year-old can easily figure out that buying stuff on finance means you don't get a good deal, why do so many people fall for it?

A friend of mine used to drive a truck around town selling kids' clothing on credit. She did a roaring trade. The clothes were nice so that got me interested, but I quickly backed off when I saw the prices. Needless to say, the poorer Tauranga neighbourhoods were her hunting ground.

I don't watch a lot of TV but when it's on there always seems to be some ad screaming "interest free for 12 months" or "need cash now?"

I know exactly how hard it is to get back into the black figures when dealing with a huge debt.

First I had a crippling student loan, and a few years ago I had to move house unexpectedly without a penny to my name. I hardly had any possessions left either. To make the new place liveable, I had to buy or borrow everything.

I am still amazed by the goodness of the people I worked with at the time. They gave me beds for myself and the kids plus a big box of linen, a dining table and chairs, a fridge/freezer, some pots and pans, a TV, and some bookcases.

It was a huge help and I'm forever grateful, but I still had to buy a whole lot of other stuff, from a washing machine to teaspoons, plus I had to cough up three weeks' bond, a letting fee, and a week's rent in advance.

No matter how carefully I made my purchases - Trade Me was my best friend - I was still looking at a credit card debt of more than $15,000 by the time we were all set up.

It took a long time of frugal living and working around the clock to pay that back, grabbing every bank's credit card switch-over deal that came along, but I managed it.

I hope I'll never find myself in that situation again but, if I do, at least experience has taught me how to get by on little.

Things are better now. I'm debt free. But I still have a second-hand TV, a crappy reconditioned laptop, an old car and few luxuries. I have a huge travel wishlist but haven't had a proper holiday in ages.

And guess what? That's fine by me. It would be nice to have the latest of the latest but I don't need fancy stuff to be happy.

It's true that the working poor can't afford new merchandise or the latest technology without using a credit card or getting a personal loan, but I'm just staggered by how quick and easy it is in New Zealand to buy things on finance.

It's even uglier that companies in this business directly target people on low incomes.

In Saturday's Bay of Plenty Times Weekend, we published a story by reporter Sonya Bateson about lending companies. It was published on our website on Monday.

Consumer Affairs Minister Craig Foss last week announced the introduction of a new bill to regulate money lending and repossession.

It includes measures such as banning lenders from the industry if they don't lend responsibly, putting controls in place against misleading and deceptive advertising, and stopping money lenders loaning money if the repayment will cause substantial hardship for the borrower.

I guess that's a start. If it was up to me, I'd put a stop to it immediately.