Becoming money smart

Posted on October 13, 2022 by Iosis

Janelle* was a young mum in her early 20s when her debt journey began. She came to Iosis for help about two years later. By then, finance company loan and credit card interest were skyrocketing.

“I had a couple of debts that were hard to deal with. It was making me not able to get food and basic needs. I was struggling financially,” says Janelle.

The finance company loan had been to fix a TV and buy a car. Janelle first used the credit card to buy a vacuum cleaner and stereo. These were all simple purchases. But Janelle admits that she did not appreciate at the time how debt could spiral out of control.

“I didn’t understand how hard it was going to be to actually pay off and that there was a lot of interest. It was not a well-thought-out plan. It seemed as if I wasn’t paying it back because the interest was so high; more would just go on top.”

The debt affected more than her financial situation.

“It was mentally draining,” says Janelle. “I was worried all the time. I couldn’t sleep because I was wondering where my next meal was going to come from. It was hard, especially having my child.”

Her first meeting with Iosis’s financial mentor, Karen, took place by phone.

“It was nerve-wracking because I didn’t know what to expect. But Karen was super lovely. She was always giving motivation, kind words, praise, making you feel you were doing good. It was super helpful. It made me feel hopeful, that’s for sure!” says Janelle.

Janelle developed a budgeting plan with the help of Karen. And she started implementing Karen’s tips on financial management. One of these was around setting a budget for food and searching for specials at the supermarket.

“At first it was hard, but now it feels like a natural thing to do. Which is good because, even if it is a dollar or two, I save some money,” says Janelle. 

Another important tip Karen gave was to take advantage of the 20 hours free early childhood education provided by the government. This saves Janelle around $70 a week.

But one of the largest steps to financial freedom came as a result of Karen liaising with non-profit organisation Nga Tangata Microfinance. They paid the loan and credit card bill. Janelle now repays them, interest free, in affordable installments. Her last payment will be in May 2023, a date that she is eagerly anticipating.

“I am so excited! I can’t wait, because that is extra money in my pocket. I couldn’t even take my son out on outings. It was so sad. But now I feel like it is going to be paid off so soon, I am going to get the chance to do that finally.

“My stress levels have definitely gone down a lot. I am relieved and a lot calmer and not so worried. Knowing it’s not that long away when everything is going to get much, much better. Everything has improved heaps emotionally.”

Now that she is close to her financial goal, Janelle is clear on what she will do differently in future.

“I would definitely not get a credit card again. And as for the finance company, I would not get a loan again. I would save. That’s what I plan to do.”

To others who are caught in the debt trap, Janelle has some words of advice and encouragement.

“I’d refer them to Iosis, for sure, and let them know there is help out there. You have got to build that courage to ask. Don’t be shy, even though, for me, it was daunting. But there is definitely light at the end of the tunnel. It gets so much better when you do get help.”

*Name changed and stock image used for privacy

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