In Times of Need – October 2007

In times of need…… Don’t borrow!!!
Over the past year 10 Finance Companies have gone into receivership. I strongly believe that the contributing factor is the ease with which credit is available. Many of us will remember the days when applying for a mortgage was a little like scaling Mount Everest, and for women it was even worse. The usual questions were targeted at marital status, number of children and the likelihood of remaining in employment.
To me it is really scary to now see advertisements in the media offering loans to Bankrupts, poor credit ratings, beneficiaries, consolidation of debt,  etc. The obvious message to the community is that it is easy to borrow today and pay back tomorrow. With the added incentive of purchasing major items on ‘no deposit, no interest and no payments for 24 months’ it is easy to see where the problems arise.
At the Rotorua Budget Advisory Service we see clients on a daily basis who have overcommitted themselves financially. Often it is for cars purchased on Hire Purchase, loans which have been easily accessed at high rates of interest which quickly become unaffordable, and then, when the payments are due to commence two years after an item has been purchased, another budget blowout.
It is interesting to note that ‘providing for Christmas’ is still a very effective means of advertising. Christmas Clubs with technicolour promises of heavily laden Christmas feasts, which are actually far more expensive than our local supermarkets. Even more horrifying is the somewhat Draconian cancellation clauses in some cases which include the clause relating to loss of 50% of contributions if canceling 90 days prior to delivery.
In times of need, if income does not seem to stretch as far as you would like, it may be timely to make that appointment with the budget service, and, most importantly, to focus on family needs first, with all of the wants at the bottom of the list. Shelter, food and warmth will continue to be the top priority for us all
Pearl Pavitt
Public Relations Officer
Rotorua Budget Advisory Service

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