The team at North Shore Budget Service. From left: Bryce Diaz, Drew Glucina, Keith Adams, Christine Watson, Abid Al -Atafi and Nick Handey

The latest lockdown has been tough for many whānau in Aotearoa, and those in Auckland are especially feeling the pinch.

North Shore Budget Service has been in service for more than 26 years and continued to work with their clients in the region throughout lockdown.

Following the fallout from COVID-19, their financial mentoring services were in high demand.

“Many people have struggled to keep their head above water following COVID-19, and just staying afloat has been all we could hope for,” says manager Drew Glucina.

The community were so adversely affected that the team exceeded funded sessions by 20 percent to meet the demand.

They have assisted more than 1600 clients over the last 12 months with financial mentoring sessions.

This has been in clinics throughout Auckland or on remote video calls around the country with the teams’ seven financial mentors.

Drew says the extraordinary event brought unprecedented disruption to people’s lives.

“We helped take away the anxiety and stress for clients by giving them the confidence to pay their bills, mortgage, rent etc, and develop plans for their future,” she says.

“Everyone’s circumstances are uniquely different, so our specially trained financial mentors have the experience and knowledge to identify the issue and provide practical, supportive and empowering one-to-one private sessions.”

Drew says them team has gained an insight into how many people from all walks of life and all demographics are in need of financial support.

“The cost of living with rent, power, phone and petrol expenditures have all increased significantly for many of our clients, with no matching increase in income,” she says.

“They come to us with unmanaged debt and substantially in arrears because their income is not enough to cover their basic living requirements.

“Some are living in emergency housing because of high rents in Auckland, or have bills to pay for which they don’t have adequate funds.

“They then borrow money and fall rapidly into arrears, and may face creditors threatening to send debt collection agencies or repossess assets. Some are relying on credit cards just to feed their families, and so begins a spiral into more and more debt.”

What’s happening

Another trend the service has seen is the growing needs of the senior community looking for financial assistance and help budgeting for their daily needs.

Drew says those needs are not being addressed by banks and other financial providers, and the elderly often lack the skills and knowledge about online banking, cybercrime and dealing with financial and digital services.

“This past year we have seen an unprecedented number of clients wanting us to provide advocacy for them with finance companies, the IRD, the Tenancy Tribunal, Work and Income, utility companies, debt collection agencies and companies providing delayed payment options,” says Drew.

“This growing trend of providing more advocacy work on behalf of clients illustrates how many people struggle to deal with their own money management issues and deal with those institutions.”

Another growing trend is the amount of organisations working with people with mental health problems and addiction (including drugs, gambling, alcohol and cigarettes) who bring their clients to the service for financial assistance because such organisations are not equipped or trained to deal with these issues.

They’re also seeing more and more self-employed contractors and small business owners who have not been able to keep their personal expenditure and their business expenses separate, and who are having difficulty with GST and taxes in general.

They have borrowed money at high interest rate rates, or are guarantors for business loans, with creditors chasing them for debt settlement.

An increasing number of clients have also been in touch to try and make early withdrawals from their KiwiSaver funds in order to pay debt arrears because their outgoings are higher than their income.

Drew says many new immigrants come to the service with serious financial problems, partly because they do not really understand our financial systems.

“Many finance companies and credit card companies take advantage of their vulnerability, and soon the new immigrants find they cannot even cover their basic living expenses because the cost of covering their debt has ballooned and become unsustainable,” she says.

“We see that finance companies are still lending money without checking that their new clients can service the debt.”

The importance of financial literacy

Financial literacy has always be a passion of Drew’s.

She says developing and implementing core financial capability budgeting services to help Kiwis with their economic wellbeing and budgeting has never been more vital – especially in the fallout of COVID-19 and the economic crisis.

“Financial security is, by definition, the knowledge that your income will be enough to consistently cover your expenses. It is the peace of mind you get from knowing that at the end of the day you can make ends meet,” she says.

“Too many New Zealanders have seldom known that feeling, and in a COVID-19 world, it’s a feeling that many people have lost as the pandemic has severely impacted upon jobs and livelihoods and elevated costs and unexpected expenses.”

Drew says these are worrying and uncertain financial times for many people and having confidence in your ability to pay the bills is crucial, but without help it can be an uphill battle.

“We want financial freedom and we want to tell our dollars where to go, not ask where they went. To stop treading water, we need a financial plan,” she says.

“Financial education is more valuable than money.”

Drew says living through COVID-19 is an incredibly stressful period, because although it is a health-based emergency, it’s also a financial-based emergency too.

The government put in several financial measures to support people during the crisis, however many Kiwis were not prepared for a personal financial crisis.

The subsequent lockdowns throughout the country only raised the need for confidential money management experts, like North Shore Budget Service.

“The crisis will continue to reverberate on our economy for some time and we will feel the effect on our personal finances and livelihoods,” says Drew.

“We can work towards a future of no financial hardship if we start with a better understanding of our own finances.

“Financial education leads to developing a financial plan and experiencing financial stability, financial wellbeing and financial freedom.”

If you or anyone you know needs more support with personal finance, your can contact North Shore Budget Service on 09 486 6206 or our MoneyTalks helpline on 0800 345 123.