Families who have an emergency savings account would be less likely to be tempted to visit loan sharks, Minister for Pacific Peoples Aupito William Sio says.

Sio, who is also MP for Mangere, says he saw first-hand the harm done to families and communities by “loan sharks” who offer quick access to high-interest debt.

“We need to have open conversations about money to restart a culture of saving, and pass that on to our children.”

Peter Cordtz, the Commission of Financial Capability’s head of community programmes, says a savings buffer would help people achieve their long-term financial goals, such as home ownership or a comfortable retirement.

This ‘buffer’ would help them deal with unexpected emergencies that might otherwise lead to high-cost debt, Cordtz says.

Insurance was also something to think about, Cordtz says.

“This isn’t just about saving, it’s also about ensuring they’re properly insured. It’s not a question of whether you can afford it, it’s about understanding what’s at risk if you don’t have a buffer or adequate coverage,” says Cordtz.

Sio says the first step is for families to start talking openly about money, and “have an honest discussion about how they would deal with a financial crisis”.

“Building our financial capability will help our families, our communities and our country, so we as a nation can deliver the services our people need,” Sio says.

Sorted Money Week is an annual public awareness campaign run by the Commission of Financial Capability, aimed at helping New Zealanders sort their personal finances.

The theme of this year’s Money Week, to run from 3 to 9 September, is ‘Weather Life’s Storms’. The aim is to encourage Kiwis to think about three areas that will help with unexpected costs – building an emergency savings account, gaining insurance cover for losses they couldn’t easily absorb, and making sure they have a will to protect their loved ones.

For more info on Money Week, visit moneyweek.org.nz

First published 3 September, 2018

JUNO does not contain financial advice as defined by the Financial Advisers Act 2008. Consult a suitably qualified financial adviser before making investment decisions. This story reflects the views of the contributor only. Content comes from sources that JUNO considers accurate, but we do not guarantee that the content is accurate.