What you need to know

  • It’s a great idea to make a budget. It helps you keep control of your money, and helps you plan for the future.
  • Pay off your debts as soon as you can because the longer you have a debt, the more interest you’re charged, and the more money you owe.
  • If you’re struggling with mortgage or rent payments, talk to your bank or a budget advisor to find out what they can do to help you.
  • Before you take on more debt to buy something new, think about whether you really need it. If you’re buying on credit or with another loan, we encourage you to talk to your bank or budget adviser about it.
  • Having kids is expensive. There are lots of ways you can save money on children’s activities and the things they need.


A budget is a plan to reduce your debts so you have enough left over to meet your needs.

It’s easy to do. To make a budget, you just add up how much money is coming into your household (your income) and how much is going out (your spending), so you can plan to make the most of what you have.

If you're able to spend less than you earn, a budget can help you figure out how much you can save.

If you spend more than you earn, a budget can help you see where that extra money's being spent. You'll also be able to see if there are ways for you to change the way you spend.

When you’re preparing a budget, make sure to include small costs because they add up over time, and allow for extra spending around Christmas and birthdays.

It’s helpful to think about unexpected costs that could arise, like repairs and dental bills.

If you don't have a budget and would like one, check out Sorted's budgeting tool


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Sorted is a free service powered by Commission for Financial Capability, the government-funded, independent agency dedicated to helping New Zealanders get ahead financially.

Good money management

Budgeting’s not just about what you spend, it’s about where you spend it. Realising where your money goes gives you information you can use to manage your money better.

If you know you’re being charged late payment fees on your bills, you could plan to pay them on time by setting money aside each pay. If you can’t make a payment on time, you could contact the company to see if you can make arrangements to pay later. You can talk to your bank or budget advisor for help with this.

Other ideas:

  • Pay off your debts as soon as you can because the longer you have a debt, the more interest you’re charged, and the more money you owe.
  • An easy way to pay off a debt is to put a bit towards it every time you get paid, using any money you have left after bills are paid. You can organise to pay it straight from your bank account so you don’t have to think about it and don't get tempted to use the money for other things.
  • Ask your bank about automatic payments or options to consolidate your debt. This is when all your debt is rolled into one loan making the interest lower so you can pay it off faster.
If you need help from a trained budget advisor, contact FINCAP on 0800 345 123


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We provide support to the budgeting and financial capability sector.

Managing debt

Mortgages and other debt

Your bank

Talk to your bank about their fees and interest rates on any loans you have, and find out if there are changes you can make to save you money. Generally, you’ll save money in the long-term by paying off debt as quickly as you can.

But if you’re struggling with mortgage payments, talk to your bank to find out what they can do to help make repayments easier.

If times are tough, you could consider:

  • taking a repayment holiday (where loan repayments are put on hold for a period of time)
  • changing your mortgage so you only pay the interest on the loan for an agreed period of time.

Either of these options is a temporary solution to ease financial stress, but may end up costing you more in the long-term or impacting the term of your mortgage.


Credit cards

The high interest rates on most credit cards makes them the most expensive way to access money. Because of this it’s a good idea to pay down credit card debt as quickly as possible.

Paying down debt

It’s a good idea to try:

  • paying off debts with the highest interest rate first
  • combining everything into one loan with a lower interest rate (consolidation)
  • paying down your credit card bill in full before the due date so you don’t pay interest
  • making sure you have enough money in your account for bills so you don’t pay overdraft fees.

Talk to your bank or a budget advisor, or to someone you trust about your best way to budget to pay off debt. 

Taking on new debt

Before you buy anything, especially non-essential items, ask yourself:

  • is there extra money in your planned budget to pay for this?
  • is this purchase something you or your whānau need, or something you want?

If you need to borrow money to pay for it, ask yourself if instead you could wait for the item while you save, wait to see if it goes on sale, or buy it second-hand.

If you decide to go ahead and borrow money to pay for it (whether on hire-purchase or on credit), read the loan contract carefully with a budget advisor or someone else you trust. Before you sign, work out:

  • how the repayments will fit into your budget
  • how long it’ll take you to pay back the loan
  • how much interest you’ll pay each week
  • how much interest you’ll end up paying over the term of the loan
  • whether there are any other charges
  • whether you’re getting the best possible terms for the loan
  • if this is the best loan rate available
  • whether it’ll cost you extra if you pay it off early.

If your loan has an interest-free or no-payments period, or both:

  • when you need to start making repayments
  • what are the conditions if you still owe money when interest starts being charged
  • if there are any other charges.

Talk to your bank, budget adviser or someone else you trust about your options before you take out a loan.

Planning for the future

Budgeting helps you set and achieve long-term goals for your money, like paying off debt, or making goals for the future.


A budget can help you decide whether you can save anything right now. Remember you don’t need to put away large amounts of money - small amounts add up over time.

Kiwisaver and superannuation

Saving small amounts now can make a huge difference in the long term. Kiwisaver is a voluntary savings initiative where the government kick-starts your retirement savings. You can also withdraw your contributions to help buy your first home.

If you’re employed, your employer will also contribute to your savings.

Even if you’re not employed, but you contribute $1042.86 annually to your Kiwisaver account, the government will contribute $521.43.

Kiwisaver hardship is also available for those experiencing significant financial hardship.


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KiwiSaver is a voluntary savings scheme to help set you up for your retirement.

Cost-saving ideas

Here are some ways you can save money on things your children need:

  • look for specials and buy things in bulk where you can
  • borrow items in good condition where you can. You may be able to access a new Pēpi Pod®, wahakura, or cots through the local DHB
  • join a toy library rather than buying lots of toys
  • buy second-hand items
  • if you’re buying new, try to avoid paying full price. Wait for specials or sales, especially on big items
  • children grow out of clothes and shoes really quickly. You may find other parents you know offer you clothing and shoes (and other things like toys and books) their child has grown out of. You’re helping them make space for the other clothes, toys and books their child now needs. You can offer this to others as your child grows
  • if you don’t know other parents, local churches, organisations like the Salvation Army, or iwi providers may be able to help. Some local Plunket groups have sales where you can pick up inexpensive second-hand clothing and toys. You can also pick up bulk lots of children’s clothes on sites like TradeMe.

Other cost-saving ideas:

  • make the most of free or low-cost activities in your area like playgrounds, parks, libraries, nature reserves, swimming pools, and museums
  • think about getting annual memberships to places like zoos – they offer better value for money than one-off visits
  • make stuff at home. Gardening and cooking are two of the home-based activities kids enjoy
  • join a playgroup.