“Be a smart alien and do the maths”Posted to Money Week on 14-08-2017
New research has uncovered fresh insights into New Zealanders’ attitudes towards debt.
At a time when household debt relative to income is at record levels and being in debt is the new norm, the snapshot online Money Week Debt Survey found that debt weighs heavily on our minds, yet we believe we deserve to have money to spend.
But if we’re hoping the spending money will come from family or friends, we’re out of luck - unless we’re pretty desperate.
While eight out of ten people would lend to someone they know, many told us they wouldn’t hand over the money easily. They said they’d insist on conditions, keep the sum low and lend for emergencies not luxuries or lifestyle.
And anyone hoping for a helping hand is more likely to get it from a family member than a friend.
Retirement Commissioner Diane Maxwell said: “We’re used to being in debt, but that doesn’t mean we like it. Many people told us that lending and borrowing money can ruin relationships, so they’d only deal with small amounts, for a short time and often as a last resort.
“People also care how the money is going to be spent. They are happy to help family out, if they can, to avoid high interest rates, buy a house or household essentials or if they are sick.”
More than a thousand people completed the Money Week Debt Survey, run on the Commission for Financial Capability’s website as part of this year’s Sorted Money Week.
The aim was to understand more about people’s attitudes towards borrowing, as we ask the nation “What does debt do for you?”
We also asked people in the online survey what they would tell a friendly Martian about debt. Here’s what they said:
“Be a smart alien and do the maths.”
“Decide how hard you're prepared to work and what you’re prepared to sacrifice before borrowing money to buy that spaceship.”
“Stay on Mars. New Zealand is too expensive.”
“Enjoy this money as it will take light years to pay it back.”
“Don't go crazy, you will have to pay it back on this planet, with interest! Live comfortably not unreasonably.”
“Like your space ship, debt is an instrument or tool to help you get places and achieve things but you must treat it carefully and know how it works or it could kill you!”
• Eight out of ten people would lend to a friend or family member
• Three quarters of them would only lend less than $5,000
• One in ten would lend $50,000+
• Six out of ten would borrow from a friend or family member
• One in three strongly agree that they work hard so deserve to have the money to spend
• Half strongly disagree with the statement “I have debt but I don’t really think about it that much” which suggests they think about it a lot.
What is Sorted Money Week all about?
Sorted Money Week is an annual series of events across New Zealand that focus on financial capability.
This year’s theme is: what does debt do for you?
The week will kick off with a launch event at Parnell District School on Monday 14 August, where students have formed a finance club to learn about how money works, so they can make informed choices for their future.
Design students will also play a key role this year. The Commission ran a competition with Auckland’s Media Design School to create a poster campaign aimed at getting young people to focus on debt.
The winning campaign is featuring on billboards and at events throughout the country and on social media posts during the week.
And the Commission staff’s children are featuring in a fun video campaign on social media.
The Commission has a series of other events lined up including:
- Tues 15 August: Pacific Women and Money Fono (Auckland)
- Weds 16 August: I’ll have what she’s having! women’s event (Auckland)
- Thurs 17 August: Cooking up ways to combat debt – pop-up restaurant challenge (Auckland)
- Fri 18 August: “Tales from the Tent” tackles student debt (Wellington)
Visit moneyweek.org.nz for more info.
Next: On the shoulders of others