Facing up to debt

In her lowest moments, struggling with depression, addiction and debt, Tanya reached out for a tiny thread of hope from The Salvation Army. She held on and it became the start of a life transformation, leading her to giving back as a budget advisor, providing the same thread of hope for others.

When clients step into her office, debt counsellor Tanya understands. She’s seen it all and felt it all. The first thing she does is congratulate them on making a brave step in coming in—and then tells them, ‘I’ve been where you are. All those emotions you’re feeling—I’ve felt them, but it can only get better from here.’

Tanya is living proof that things can get better. Alcohol addiction led her down a dark path, finally landing her in court, but that led to the first of three life-changing meetings—although she didn’t realise it at the time.

Inspired by care

‘I had to do community service and the probation officer suggested I go to The Salvation Army, and see if I could do my hours there. I got in touch and that’s where I met [Captain] Joe [Serevi] in Hawera. What an amazing man! It brings tears to my eyes thinking about what he did. He was so willing to share with me and was so selfless.’

Still struggling with addiction and severe depression, Tanya eventually ended up in prison. It was a turning point. She stopped drinking two days before she went to prison, and inside she went through the prison addictions rehabilitation programme. It was there she also had her second life-changing meeting; this time, with Lieut-Colonel Jennifer Groves, who would visit her in prison and encourage her.

Inspired by the care she had received from Joe and Jennifer, the day she got out Tanya headed straight for the nearest SalvationArmy Community Ministries centre to where she was living. There she got a place in supportive accommodation and began going to an addiction rehabilitation day programme for support.

‘It was what I so desperately needed. I honestly don’t think I would have made it otherwise. I think I probably would have ended up back in jail if I didn’t have that strong guidance from The Salvation Army. It was scary. I can only imagine how lost some people must be, not knowing which way to go or who to go to.’

Facing up to debt

However, prison had left Tanya with another problem. Before, she had a job and had been able to comfortably pay off her credit cards and loans. But once she went to prison, her bills—including her court fines—weren’t being paid and she ended up in severe debt. When she got out, she was supporting her teenage son, but at first she didn’t have a job and wasn’t able to receive a benefit.

Overwhelmed with all the changes going on and focused on just staying afloat, Tanya did not think of budget advice until it was suggested to her. It was a frightening moment—telling a complete stranger all her problems. But it was something she knew she had to do.

‘I knew I couldn’t do it on my own. I didn’t know how to communicate with the finance companies. It became so over-whelming and frustrating. I had never had to do that before, and I was coming out of addiction and learning all new ways to cope.’

With a budget advisor on board, the finance companies were more interested in discussing a plan, and with the help of her advisor Tanya was able to organise a payment schedule. She got her income set up to go into split accounts, with the amount she needed to pay going into a bills account she couldn’t touch and the remainder going into an everyday account for living expenses. Slowly, Tanya began to pay back her debts, starting with the smallest. Finally, the last credit company agreed, after her good work repaying, that if she made one last lump sum payment they would wipe the rest of her debt. All this took two and a half years.

‘I was living on a really, really tight budget, but I knew at the end of the day it would give me and my son a better life. The sacrifice wasn’t that big, because I knew I would be debt free and I was taking responsibility.’

Impossible becomes possible

Excited and grateful, Tanya began volunteering where she could with The Salvation Army, trying to give back. It was while there she had her third life-changing meeting, with then head of Hamilton Community Ministries, Major Pam Waugh, who asked her if she would do the training course to become a budget advisor. Tanya wasn’t confident as she has dyslexia and never did well at school, but she agreed to try, and was soon top of the class.

‘I guess Pam saw things in me—things I didn’t think were possible,’ Tanya says.

Despite being offered jobs by numerous people, including the course tutor, there was only one agency Tanya wanted to work with. She began volunteering as a Salvation Army budgeting advisor at the end of 2010 and was officially accredited as a budgeter in early 2011.

Since then, Tanya has gone on to become a senior budget advisor overseeing the training of new staff and a regional representative for budget advice services in the area, along with other leadership roles. She still sounds amazed trying to explain the change and what she’s doing now.  

‘I was a lost soul. I was lost and it was like a little thread of hope was just poking through, and I grabbed hold of it and held on. Then I met Jennifer—she was another amazing support woman—and that little tiny thread was still there for me to hold, and I knew it was going to be okay at some point. When I came out [of prison], I was still holding on to that thread, and it just kept getting bigger and bigger. Now, I’m just giving back what’s been so freely given to me.’

Empathy breaks down barriers

Debt can be a crippling thing for people. Being able to share her experiences with clients, to take off her budgeting hat and simply talk to them about her past, is a great way to break down barriers and connect, Tanya says.

People fall into debt through many different situations. Sometimes bills or loans get too much and people get into a cycle of borrowing to pay; others lose their job, or a partner dies. ‘There can be an accident that means they can’t work,’ says Tanya. ‘And there are those that live way beyond their means and think, “Okay, I’ll go get a Visa card and then a MasterCard.” Or they go from finance company to finance company—Cash Converters and Chequers are big ones.’

Another problem is the clothing trucks that drive around lower socio-economic areas targeting people there. About eight different companies run the trucks, which carry everything from designer label clothing and the latest cell phones and laptops, to food and other groceries. They offer people the chance to take up to $500 worth of items and pay for them later, Tanya says. The catch is in the 26–28 per cent interest rates and the prices charged for items. One of Tanya’s clients was charged $11 for two cans of spaghetti. Another, $80 for a t-shirt. In four years, Tanya has only seen two clients who did not have debt with the trucks.

People driving the trucks could be very aggressive in their approach, to get people to buy, she says. ‘They will drive into the street and park up, and as soon as they see someone they come racing up their driveway. They don’t do credit checks, they don’t care. The clients think they’re a blessing. That very moment, that client’s want has been satisfied or their emergency has been released. When that truck turns up and they have got no milk or Weet Bix to send the kids to school, that emergency has been resolved.’

Often, people leave it late before they come looking for help, but Tanya says she understands that—she felt the same. ‘There was so much guilt and shame of what I had done, and my addiction. I thought, “This is all I deserve”, and that this was my life and I just needed to suck it up and get on with it. It’s hard trying to think anything different when you have collection agencies, creditors and the justice system all telling you this is how it is.’

What follows can be a slow process trying to help the clients pay back their debts over years and help them understand how to stay debt free. It can be frustrating, as each success is quickly replaced by more people in need. But seeing people getting the education and spreading it is great, Tanya says, and seeing people come out the other side is a hugely rewarding and humbling feeling.

‘It’s beautiful, I tell you! They come in, they’re slumped, heads down and they don’t have a life spark in them. You see the shift; you see them starting to straighten up. You see them starting to smile and to realise, ‘Hey, there’s a better life out there. I just have to put in the hard work—but I deserve it.’

And, looking back on where she’s come from, Tanya says the biggest buzz of life today is staying sober and giving back.

‘I never thought that I would be able to say, “I’m six years sober”—I celebrated my six years last month. Also, being able to give back is the second biggest buzz for me. To see a client come in saying, “You threw me that lifeline, thank you so much,” tells me I’m here for a reason. I believe God has placed me here for a reason and this is my reason: these people that come in to see me every day. It tells me I’m doing good.’

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by Christina Tyson (c) 'War Cry' magazine, 30 May 2015, pp5-7.
You can read 'War Cry' at your nearest Salvation Army church or centre, or subscribe through Salvationist Resources.

New Zealand’s Disturbing Debt Picture

Alan Johnson, senior policy analyst with The Salvation Army’s Social Policy and Parliamentary Unit, reflects on New Zealand’s household debt.

At the end of 2014, New Zealand households had, on average, $130,000 of debt, of which almost $13,000 was consumer or credit card debt and the rest was housing related debt (mortgages).  

The amount of debt most Kiwis have is rising, and having debt seems to be an accepted norm for New Zealanders. For four years after the Global Financial Crisis of 2007/08, New Zealanders stopped taking on more debt, with the average level of debt remaining the same each year until 2012. Since then, though, the average amount of debt for households has increased by over seven per cent and average credit card and consumer debt has grown by six per cent.  

But these figures reflect debt trends for middle and upper class households who can get a mortgage and have a good enough credit rating to get consumer credit and a credit card. Most of the people The Salvation Army sees for budgeting advice do not fall into this category. They are most often overwhelmed by debt from loan sharks, clothing trucks and payday lenders, as well as fringe finance companies offering appliance and car loans.  At the extreme end of lending, people are paying interest rates well in excess of 50 per cent and often end up paying excessive and unjustified administration charges and default penalties.

The Salvation Army remains concerned about the onerous and oppressive nature of much of this debt, and the offensive and threatening conduct of fringe lenders and their debt enforcers. Although the Government has made several positive moves to address these practices—such as the introduction of the Responsible Lending Code—it has not gone far enough to curb greedy and unjust behaviour on the part of many fringe lenders and second and third tier finance companies.

The Salvation Army believes there needs to be cap on interest rates, including add-on charges and penalties. And that there also needs to be stiffer penalties—including the real threat of jail—for companies and people who break such laws.

Budegting tips: getting started

Doing a budget can feel overwhelming and can become one of those jobs you put off till tomorrow. Knowing how to start can be a big help, so here are some tips for getting started from Kiwi budget advice website Sorted.

Start by setting your goals:

• Think deep about what you want in life. Work out what you want to achieve, when and how much money you need to do that.
• Set goals for the short, medium and long term, with a dollar value on how much you want to save and a timeframe to save it in.
• Make your goals realistic. If you set a goal you can’t reach, you’ll end up feeling down and thinking that the whole budgeting thing doesn’t work!
• Make your list with a partner or family. Shared goals are easier to achieve.
• Write them down. Put your list on the fridge or somewhere else you’ll see it, to encourage you to get to your goals.  

Keep a track of what you spend:

• Write it down in a diary, use an app on your phone or an online spending tracker like financial.me or pocketsmith.com.
• Work out what you want to get before you go to the supermarket. Take a list and have a budget for what you’ll spend. If you spend less than you budgeted, you can save it for later or enjoy a treat.
• Pay attention to the little things. Spending $8 on lunch may not seem a big deal, but it can really eat into your budget. If you buy lunch two days a week, that still adds up to more than $800 a year.
• Get ready for the expected. If there’s a special event coming up like a birthday or Christmas, plan for it now to avoid paying more later.
• Get ready for the unexpected. Illnesses, funerals, car breakdowns or the fridge packing up—life happens and it’s important to be prepared.
• Don’t be too hard on yourself. Set a budget that still gives you a life.

The Sorted website provides some great budgeting tools and other practical support to make budgeting easier. Go to www.sorted.org.nz.

If you need one-on-one help to overcome debt, contact The Salvation Army. Go to  www.salvationarmy.org.nz/centres for your nearest welfare support centre.