When did balancing the family budget turn into a juggling act?

I run a social finance company, helping Kiwis get over the debt wall and on with life. I'm also an accountant.

So am I living a life of financial perfection with the mythical 30% of my income in savings for a rainy day, a KiwiSaver balance I can retire on, and well washed and well-behaved children who earn their keep?

Not even close.

Like many of our customers – even the relatively well-paid ones – I've had to learn a new skill that probably won't make it into the financial literacy curriculum: juggling.

In July my mortgage went up by about $1000 a month. At the start of August, I needed to visit family in the UK – an unplanned, unbudgeted trip where the flights alone cost over $3000. And when I got back to New Zealand, emotionally and financially spent, the WOF and service on my car was due. So, I decided against the service and settled for keeping my fingers crossed the car passed its WOF. (It did – one tyre and a fog light bulb later.)

So, I’m driving around in a working, road-legal car and I was able to juggle the increased mortgage payments and the UK trip through credit cards and a revolving credit facility. We’ll financially juggle to the end of this year and come through it (hopefully) relatively unscathed. I realise that there is privilege in my story.

But not all Kiwis are so fortunate.

National’s Commerce and Consumer Affairs spokesperson Andrew Bayly recently commented that he believes that following changes to lending regulations, “anybody wanting to borrow $600 for car repairs is precluded. So where we have ended up is with a big social issue. Some vulnerable borrowers have gone to likes of outlaw biker gangs and their ilk and been ripped off.”

We're seeing the human cost of that every day in my business Money Sweetspot.

The reality for many is that the changes to the regulations have reduced access to responsible credit or kept people stuck in higher-cost facilities. With the most recent updates some of the has reduced, but the impact is still there.

Car repairs are a good example of a bill that must be paid somehow, and Kiwis are turning to higher-cost lenders to do it. After all, without the car you often can’t get to work, collect the kids from school, go to the doctor's, or visit whānau.

Every extra bill adds an extra ball to the financial juggle.

The follow-on impact can then be increased spending through buy now pay later, for essentials rather than wants.

That adds another ball. You’re spending so much time being an expert juggler that being able to see beyond the struggle is overwhelming.

Which balls get dropped? Better housing, time off work with the kids, going on a course, seeing whānau, perhaps taking a holiday?

A financial juggle can quickly become a struggle, and then distress.

It’s time to quit the circus.

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