Uber Eats and alcohol are among items that Bay of Plenty residents are using ‘Buy Now Pay Later' services to purchase – and it's getting them into tight financial spots.
Amid the cost of living crisis, The Sun asked Bay Financial Mentors general manager Shirley McCombe for the lowdown of where money troubles are cropping up for BOP residents. 'We know that things like fuel prices have gone up about 32 per cent last year and food went up by 11 per cent. Most people aren't getting 20-odd per cent pay increases so they are going backwards,” says Shirley.
Pay it off warning
'The thing that will be interesting this year is the rise of ‘Buy Now Pay Later' [schemes].”
As the name suggests, ‘Buy Now Pay Later' is a purchasing scheme that allows people to obtain goods or services instantly, with flexible options to pay for them off later. 'That has made it very easy for people to get what they want when they want it – but sometimes they don't put any thought into how they're going to pay it at the other end. We see people using Buy Now Pay Later for everything from sanitary items and Uber Eats to alcohol.”
Shirley says: 'If I was going to use it I would be working out how much I had to pay. Could I fit that within my budget? Could I make payments as they come up?”
At Bay Financial Mentors, Shirley and her team first focus on the three basic needs for a client.
'A roof over your head, food in your tummy, a safe place to be – when those things are being squeezed, there's not a lot of places to go.
'I think people think our services are like: ‘I'm going to tell you to use one square of toilet paper instead of two' but it's not like that.”
Shirley says they help people understand their spending and how to manage spending better.
'People are often paying for things they don't even know. One of our team, when she first started
looking at her budget realised she was paying for a German-to-English translation app that she'd obviously signed up for several years before and was still paying for!”
Being smart
Shirley encourages people to try a financial exercise with grocery shopping. 'Go on to a supermarket app and buy the most expensive of a food item and the cheapest of say 15 items – white bread, flour, milk etc. and just see what the difference is because at the end of the day you're not going to notice any of those are different. People think it's going without but it's not, it's about being smart.”
As a free community service, Shirley says the biggest feeling people have when they leave the Bay Financial Mentors office is relief. 'It's knowing that you're in control and knowing that you can manage week to week. It's a huge relief.”
Bay Financial Mentors is at The Historic Village, 159 17th Ave, operating 9am-4pm Monday-Friday.
To book an appointment, visit: www.tgabudget.org.nz