Wising up to growing debt

BY VICTORIA GUILD

Snowed under a mountain of debt? Nelson Mail television reviewer Victoria Guild looks at a show aimed at people just like you.

It always amazes me how some people can spend money they don't have. A few years ago it was easy. You only had to smile at your loans officer and the cash, or should I say credit, was available.

For many, it's not until the bank or finance company comes to collect that money that they realise they are up to their neck in it.

Some still bury their heads in the sand and hope that the problem will go away.

In these financially stretched times, it is perhaps appropriate that a show comes along looking at how we can manage debt to stay in our homes.

Save Our Home pairs up property expert Sarah Pearce and financial adviser Hannah McQueen, who force people to face the reality of their debt situation.

The first episode was a classic case of bludging young adults milking a soft-touch mum who considered it a pleasure to "look after" them and their mates.

Yes, these guys were living at their parents' house with their partners, not paying any board, getting fed and getting a handout when they were short of cash.

Goodness only knows how, because they only had the dad's income, and grandma was living with them too. When we got a glimpse of the grocery bill, it was no wonder this lot was going backwards.

To be fair, the family had put their house on the market, but they were totally unrealistic about what it was worth. When Pearce showed them the sort of place they could afford on their budget, the mum just shook her head and said she couldn't live there.

Pearce and McQueen tried to give the mum a good telling off. She just got all shirty and said it wasn't her fault.

An attempt was made to get one son to pay his way, but McQueen got short shrift from him as he threw a tantrum and said he and his girlfriend would find their own flat. This family just didn't want to know, but they were great fun to watch.

In the end, we didn't find out whether they were able to save their home. They had put it back on the market at a lower price, but still about $100,000 above its valuation.

And really, who cared? They had rejected any sensible advice, so deserved whatever was coming.

Ron and Nong were a different story, however. This week's couple had already been made bankrupt and still owed substantial amounts on their credit cards.

They had a house which they had owned for eight years and had increased the mortgage on it to finance renovations and their lifestyle.

They also had an investment property which was worth less than what they had paid for it a year before.

McQueen and Pearce got their butt-kicking shoes back on and forced these two Buddhists to face the music. Ron got teary when asked if he was prepared to sell their home, but accepted it might be inevitable.

It appeared Ron and Nong wanted to sabotage any sale, because when open home day came around, the place was looking a bit of a tip.

They then made a half-hearted attempt to sell their plush leather lounge suite and big-screen television set, but their auction reserves were too high. McQueen and Pearce accused them of not taking their situation seriously enough, so got the movers in and took out all their furniture.

How did that feel? "It feels empty," Ron said.

It turns out it was a bluff and the furniture was put back, but Ron and Nong got the message and sold the suite and TV within the week.

The house went to auction but didn't sell. It was safe from the receiver, however, because it was worth less than the debt owed.

So Ron and Nong were safe in their home. After that wake-up call, they embraced a budget, rented out some of their spare rooms, and all Nong's wage was used to service their debt.

Three months later, they were paying off $1000 a month and had replaced their lounge suite with a far more modest floral couch.

The scary thing is that we Kiwis do tend to live beyond our means. How many of us will need to go to debt boot camp before we learn to tighten our purse strings?

COMING UP: Crime lovers will be able to take their pick next Wednesday night. Real Crime on TV1 interviews American serial killer Arthur Shawcross, convicted of murdering two children and 11 prostitutes, while on TV3, Crimes That Shook The World profiles British mass murderers Fred and Rose West, who killed young women and buried them behind their home.

- © Fairfax NZ News