Get Christ­mas bud­get­ing now

If you put your gifts and the fes­tive ham on tick th­ese hol­i­days, the bills and stress will soon start rolling in. An­drea O’neil talks to bud­get ad­vis­ers about how to keep your wal­let merry for next Christ­mas.

Kapi-Mana News - - FEATURE -

Sum­mer hol­i­days should be about re­lax­ation and fun but all too of­ten a fi­nan­cial hang­over from Christ­mas ru­ins the silly sea­son.

Peo­ple who put presents and food on credit cards in De­cem­ber will feel the pinch in Jan­uary, said Porirua Bud­get Ser­vice man­ager Robert An­to­nio.

‘‘Bills start rolling in. ‘ Take now, pay later?’ Well, the ‘ pay later’ is af­ter Christ­mas.’’

Make a res­o­lu­tion this sum­mer to get your money sorted for 2013, Mr An­to­nio said.

‘‘It’s so im­por­tant to have a bud­get – so im­por­tant. When you have debt hang­ing over your head then you get nowhere.’’

In the year to June 2012 the Porirua Bud­get Ser­vice saw 819 clients, ow­ing a to­tal of $13,713,537.23, more than $16,700 a client on av­er­age. Bud­get ad­vis­ers helped clear $1.6 mil­lion of that debt. In the greater Welling­ton re­gion 4800 clients were seen by fam­ily bud­get­ing ser­vices, ow­ing a to­tal of $55m or more than $11,400 of debt for each client on av­er­age.

A good first step to­wards a healthy bank ac­count is to visit a bud­get ad­viser, Mr An­to­nio said. They can be found through­out the Welling­ton re­gion, and vis­it­ing one is free and con­fi­den­tial.

Peo­ple are of­ten in a des­per­ate sit­u­a­tion when they visit a bud­get ad­viser, sad­dled with credit card debt and fi­nance com­pany loans, and spend­ing more than they earn, Mr An­to­nio said. ‘‘The ma­jor­ity sadly are all in debt. ‘‘The think­ing is ‘let’s live for the now’. You talk about sav­ings – well, for some of them they’re far from that point.’’

Clients have of­ten sim­ply stopped paying back their debt or have failed to pay rent be­cause of loan re­pay­ments, he said. ‘‘A lot of peo­ple for­get they’re in a con­tract and they think they’ll just stop paying be­cause they don’t have the money.’’

Eighty per cent of clients are re­ferred by Work and In­come, many of them solo moth­ers.

Maori make up 40 per cent of clients with Pakeha and Samoans 20 per cent each.

‘‘The ma­jor­ity of our clients are Pa­cific Is­land and Maori and sadly, the fi­nan­cial lit­er­acy is not too good and so a big part of our work is ed­u­ca­tion,’’ Mr An­to­nio said.

To deal with the cri­sis a bud­get ad­viser will phone cred­i­tors and try to ne­go­ti­ate re­duced or de­layed pay­ments.

Then the ad­viser and client will work through a bud­get work­sheet, list­ing all sources of in­come and all planned ex­penses such as rent or mort­gage pay­ments, vet fees, petrol and even the cost of club­bing, de­pend­ing on the client.

It’s of­ten a shock for peo­ple to see where their money goes, he said. In

the case of cars, peo­ple sel­dom plan for the cost of reg­is­tra­tion and war­rants of fit­ness. ‘‘Peo­ple think of cars as petrol only.’’ Lav­ish wed­dings and fu­ner­als of­ten de­rail Pa­cific clients’ bud­gets, Mr An­to­nio said.

Since per­sonal fi­nance is typ­i­cally not taught in school, bud­get ad­vis­ers of­ten have to in­tro­duce the con­cept of a bud­get to clients, he said.

‘‘Some peo­ple are hear­ing the word ‘bud­get’ for the first time when they come here. That tells you they haven’t got a clue. You’re go­ing back to ba­sics and teach­ing them those things.’’

See­ing a bud­get ad­vi­sor more than once helps keep peo­ple’s bud­gets on track, Mr An­to­nio said.

‘‘We’ll deal with the cri­sis but we en­cour­age ev­ery­one to come back and see us.

‘‘Come to us when times are good as well. Peo­ple think of the Bud­get Ser­vice as the last place to go be­cause you’re in trou­ble. It’s for ev­ery­body.’’

Don’t be fright­ened by the idea of some­body por­ing over your bank state­ments, said An­nette Kennedy, a bud­get ad­viser at the Porirua of­fice.

‘‘We’re not scary, we’re not judg­men­tal. It’s all pri­vate, con­fi­den­tial.

‘‘It’s all just help­ing you find out what’s hap­pen­ing with your money,’’ she said.

Clients want­ing to re­duce their spend­ing can get tips from a bud­get ad­viser, and can ask to learn how to read and un­der­stand an elec­tric­ity bill state­ment, she said.

Ideas for cheap or free Christ­mas gifts are avail­able for clients to take away.

An­other tip for Christ­mas is to join a su­per­mar­ket sav­ings pro­gramme which pays in­ter­est, rather than putting money into schemes such as Chrisco. But what­ever your sav­ings method, start as soon as pos­si­ble, Mrs Kennedy said. ‘‘Start in Jan­uary for Christ­mas 2013.’’ You don’t have to be poor to see an ad­viser, said bud­get ad­viser Shir­lene Manawaiti. ‘‘We’re here to help any­body. ‘‘Peo­ple seem to have the per­cep­tion you have to be in trou­ble to see a bud­get ser­vice but we can ac­tu­ally help peo­ple with money.’’

Photo: FAIRFAX

Coin drops: Jan­uary is the time many fam­i­lies strug­gle with money, as credit card bills roll in from De­cem­ber’s gift and food pur­chases.

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