Get control of debt
bEING DEBT FREE IS ABOUT FREEDOM, FLEXIBILITY
AND CONTROL OVER YOUR LIFE
Debt can be overwhelming. Stress can keep you awake at night and affect your well-being and relationships. Keeping up with loan payments while juggling everyday expenses can be hard enough, but when something unexpected happens, things can spiral out of control.
What is debt?
Debt is money borrowed from a person or company that must be repaid, usually with interest and fees. These added costs can make the loan more expensive, especially if you miss payments, which can also harm your credit rating. People often borrow when they can’t afford something they need or want, but it’s important to have a plan to repay what you owe. Used wisely, debt lets you access goods or services now and pay over time.
Personal loans, mortgages, credit cards, overdrafts, Buy-Now-Pay-Later accounts, credit contracts, and hire purchase are all credit products that, when used, carry debt that needs to be repaid.
It doesn't matter where you start—it's the starting that matters most! —Moni ora
Get Control of Debt
Listing all your debts is the first step toward taking control of your finances. For some, seeing their debt clearly outlined provides the guidance they need to take action; for others, the next steps may not be as obvious.
If your debt is unaffordable, adjustments are necessary. This might mean negotiating with creditors, applying for hardship support, or seeking temporary relief. Escaping debt can be difficult, but with a realistic plan, a debt-free future is achievable.
Debt solutions can include:
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Negotiating affordable debt repayment plans
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Microfinance options
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Hardship applications or KiwiSaver withdrawal
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Insolvency options: Debt Repayment Order (DRO), No Assets Procedure (NAP), Bankruptcy
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Creditors Proposal
Check out our blog 'Lost income? Take Action' for immediate strategies to ease the pressure while you work toward a long-term solution.
Once completed, the debt schedule is part of the picture; your budget worksheet completes it. Understanding your full financial position helps you decide on the best course of action.
Start with what's worrying you the most.
List what you know, estimate the unknowns,
Then add, adjust & amend as you go.
"Mary-Jane will pay $600 more for her Good Deals Loan in interest over the term of the loan"
"In this example, Mary-Jane is worried about her power being cut off but she has no worries with her no-interest loan"
The Debt Schedule worksheet helps you organise all your debt information. Its straightforward format ensures you gather all the key details needed to manage your debt effectively.
Start by listing the details about your debt—such as amounts owed, creditors, and payment terms.
Having a clear overview of your obligations puts you in control and makes it easier to prioritise next steps. Organising this information is the first move toward effective debt management.
Download the spreadsheet and enter all your debt details. A list of what's needed is below.
If you need assistance, a Moni Ora Financial Mentor can help you develop a personalised debt management plan.
1. creditor name
The creditor name refers to the person or company you owe money to. Be thorough—list every debt, even those that are old, sent to collections, or currently without a payment plan. Recording all debt gives you the complete picture you need to move forward.
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2. Total debt
Total debt refers to the remaining balance you owe. If you're unsure of the exact amount, estimate as best you can and make a note in the comments column to check and update it later. Even an estimate helps you see the bigger picture and plan your next steps.
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3. Secured or Unsecured
The 'Secured or Unsecured' column identifies whether a debt is backed by collateral. Secured debt, such as car loans or mortgages, is tied to an asset that the creditor can repossess and sell if you fall behind on payments. Unsecured debt, like most credit cards or personal loans, is not linked to specific assets, but creditors can still pursue legal action to recover what you owe if you default. Knowing which of your debts are secured or unsecured helps you understand the risks and prioritise repayments accordingly.
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4. Overdue
The 'Overdue' column is for noting any missed or late payments. If you are behind, record the amount that is overdue here. This helps you identify debt that may need urgent attention.
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5. Payment amount
The 'Payment Amount' column records how much you have agreed to pay toward each debt on a weekly, fortnightly, or monthly basis. Keeping this information up to date helps you track your commitments and manage your cash flow.
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6. Frequency
The 'Frequency' column shows how often you make payments—for example, weekly, fortnightly, or monthly. Keeping this clear helps you match your debt payments to your income schedule and plan ahead.
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7. Interest rate
The 'Interest Rate' column records the percentage charged on your loan or credit account. If possible, also note how often interest is calculated (e.g., annually, monthly, or daily). Understanding both the rate and its frequency helps you see how much your debt is really costing you and allows for more accurate planning.
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8. Priority
1. The 'Priority' column helps you rank your debts by urgency or importance. There’s no single correct way to prioritise—choose an order that makes sense for your situation and goals. Generally, debts that are overdue or at risk of penalty fees, interest, or repossession should be given higher priority, as addressing these can help you avoid extra costs and stress. Use this column to create a repayment order that works for you and supports your financial wellbeing.
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9. Comments/Notes
The 'Comments/Notes' column provides space for any extra details, reminders, or important points you want to keep track of—such as payment arrangements, contact dates, or notes to follow up. Use this section to personalise your worksheet and keep essential information handy.
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