In Times of Need – March 2009

For some time now I seem to have been predicting gloom and doom, with my concerns mainly related to the extensive borrowing that has been encouraged in the last few years. It appeared that interest rates were on the rise; surprisingly interest rates are now lower than they have been for years.
We spend much time concentrating on the difficulties experienced by our younger families, but events over the last 18 months have been affecting many of our older people. Firstly the collapse of an alarming number of finance companies leading to many people losing their investments, or being forced to await the outcome from the receivers, in the main a percentage of the original investment. While mortgage rates have lowered so have interest rates on savings. This dealt some retired people yet another blow; with interest rates falling by approximately 50%, their expected extra income has halved.
With the recession has come more pain with job losses. Many mortgages and personal loans have been approved on the basis of affordability where both partners are working. I have now seen cases where both husband and wife have been made redundant within a month of each other, all of which is extremely stressful for the families involved.
Anyone experiencing a dramatic loss in income should move to seek advice quickly.
First of all make appointments with your local budget advisor and your Work and Income Office. Government has pledged assistance for those affected by redundancies. One new initiative is the Restart Programme which provides 16 weeks of extra help. Accommodation supplements and the benefit are practical ways of assisting families who may now be on low incomes as a result of job losses.
Now may be a good time to go back to the old ways. It may be more practical to operate joint bank accounts and limit the use of eftpos cards, this helps to control finances. Only go shopping with a list, and stick to it. Become familiar with your power account, and make sure that all possible savings can be made in this area. Don’t use your bank card as an avenue for cash. Look outside the square; your trash may be someone else’s treasure, take a boarder, put in a vegetable garden.
Lastly, make that appointment to see your local budget service
Pearl Pavitt
Public Relations Officer
Rotorua Budget Advisory Service

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