How To Guide: Spotting Debt Trouble Early and what to do

With the cost-of-living pressures of the last two years, it’s not surprising that some New Zealanders are finding it harder to keep up with bills. Recent data from Centrix shows that 12.41% of credit-active Kiwis are now behind on payments, the highest level in more than a year.

At the same time, research from the Financial Markets Authority (FMA) shows many New Zealanders feel more financially confident than they were 12 months ago. Both can be true: confidence may be stabilising, but some households are still catching up on debt accumulated during tougher times.

That’s why spotting early warning signs is so important. The earlier you notice things shifting, the easier it is to get back on track.

Please note: This article is for general information only and is not financial advice. If you’re thinking about consolidating debt, speak first with a licensed financial adviser or a free financial mentor.

Expert-Sourced Guidance

To bring you reliable, evidence-based information, we’ve drawn insights The FMA, Centrix, and independent consumer researchers at MoneyHub, to help you stay ahead.

Our goal is to help members make informed, confident financial decisions and not to provide personalised advice.

Why people fall behind and why it often happens gradually

Financial pressure rarely arrives all at once. Most of the time it builds up quietly - a dental bill here, a car repair there, a rise in insurance, a higher grocery shop, or a change in work hours.

According to the FMA’s Good Cents report, many Kiwis juggle short-term financial pressure by relying on credit cards, buy-now-pay-later (BNPL), or small personal loans. These feel manageable at first, but can tip a household into arrears when another unexpected cost arrives.

The important thing to remember is that this is very common.  It’s not always poor budgeting but just life. 

Understanding that can help take the pressure off, because when something feels normal (rather than alarming or embarrassing), it’s much easier to notice early warning signs  and to take small steps before things become overwhelming..

Early warning signs and what they actually mean

Insights from the FMA’s Good Cents report, Centrix arrears data, and MoneyHub’s consumer research show that certain patterns can indicate when financial pressure may be building.

Not every sign is a crisis on its own. Most people use credit cards for everyday spending, and many of us occasionally pay a bill late or use buy-now-pay-later for convenience.
What matters is whether these things are starting to happen more often, or for reasons that feel different than usual.

Here are some of the key signs experts say are worth noticing:

1. Spending on essentials shifting onto credit more often.

Using a credit card for groceries or fuel is completely normal. What experts highlight is noticing if:

• you’re using credit earlier in the pay cycle

• it’s harder to clear the balance

• more of the weekly shop is going onto the card than before

This can be an early signal that weekly costs are slowly outpacing income.

2. Minimum repayments becoming the default

Paying the minimum occasionally is fine. But Centrix notes that when this becomes a pattern, it can indicate that your budget isn’t stretching as comfortably as it used to.

3. Bills slipping later over consecutive months

A single late bill happens to everyone, but dont make it a habit.  MoneyHub points out that repeated late payments especially across different services are one of the clearest early-stage stress indicators.

4. BNPL payments stacking up quietly

The FMA’s research shows that buy-now-pay-later is often used to smooth cashflow. Experts say it’s worth paying attention if:

• you have multiple BNPL repayments overlapping

• you’re using BNPL for purchases you used to pay upfront

• repayment dates are starting to crowd your weekly budget

5. Avoiding checking balances or statements

Feeling anxious about your balance is a sign something’s shifting.  This is one of the most consistent behavioural patterns across all three sources.

Avoidance doesn’t mean failure it usually means stress, and stress is a useful signal that something has shifted.

These signs aren’t about judgement, they’re simply gentle indicators that your finances might benefit from a check-in.  Noticing them early gives you more time, more options, and more control.

What you can do right now 

Financial capability experts consistently emphasise that small, early steps work best. You don’t need a full financial overhaul,  just a few simple habits that help you stay on top of things before pressure grows.

Here are some practical actions recommended by the FMA, MoneyHub, and budgeting support organisations:

✔  Review your automatic payments and subscriptions

It’s very common for people to forget about old subscriptions, app payments, streaming services, insurance add-ons, or memberships they no longer use.

Removing one or two small recurring costs can free up weekly cashflow and reduce reliance on credit.  Even trimming $10–$30 a fortnight could help.

✔  Review your pay cycle,  not just your budget

Experts note that financial stress often shows up in timing, not amounts. A helpful early action is simply observing:

• When does money arrive?

• When do bills go out?

• Do certain weeks consistently feel tight?

Often, shifting a bill payment date or grouping payments differently can smooth out pressure.

✔  Contact lenders early (the earlier, the easier)

This is one of the strongest findings across all sources. Banks, utilities, credit providers and phone companies all have hardship teams and they generally offer the most flexible support before things fall behind.

A short, early conversation can help avoid late fees, defaults, or stress building up. 

Experts consistently say early contact leads to far better outcomes than waiting.

✔  Set up simple money alerts

Most major banks allow you to turn on notifications for:

• low balances

• upcoming due payments

• when your credit card approaches its limit

These gentle reminders help you stay aware without constant checking and can prevent accidental late payments.  This reduces surprises and increases control.

✔  Map your upcoming “known unknowns”

Experts often point out that it’s not the everyday costs that catch people out, it’s the irregular ones:

• annual insurance

• vehicle WOFs and servicing

• school-related costs

• birthdays, holidays, family events

• quarterly rates or power bills

Listing these out for the next 3–6 months can reduce surprises and reduce the chance of turning to credit at the last minute.

✔  Build a small weekly buffer

This is a common recommendation across budgeting research. Even $5–$10 a week can create the breathing room that prevents stress and possible credit reliance.

The amount doesn’t matter.  Even a tiny buffer can help. What matters is having a little breathing room so surprises don’t knock your budget off course.

We explored this idea in an earlier Money Matters article: "the power of emergency savings" It’s a helpful read if you’re looking to rebuild some financial stability.

✔  Reach out for support if money feels stressful

Finally, if you are worried about money, please know you’re not alone. Whatever your circumstances, there is help available and things you and your whānau can do to see you through tough times and ease your financial stress.  

Talking early always helps. Here are some support options:

MoneyTalks:  A free, confidential helpline for financial advice, support, and connections to local services.

Phone: 0800 345 123
Text: 4029
Website: moneytalks.co.nz

Sorted:  Provides free, impartial financial information, guides, tools, and calculators.

Website: sorted.org.nz

Work and Income:  If you're struggling financially or have had an unexpected bill, they might be able to help you, even if you're working. And they have a Managing your Money guide.

Website: workandincome.govt.nz/eligibility/living-expenses/

Monument Financial Advisers:  If you need help to understand your insurance options. They have been looking after our Members insurance needs for over 30 years.  

How HealthCarePlus Can Support You

Once you’ve spotted the warning signs and taken a few practical steps, the next question is often:

“How can I free up a bit more room in my weekly budget to build my emergency buffer?”

That’s where your membership to our "Better Off Together" program can help by reducing your everyday household costs, little wins at a time that you can then direct into your emergency savings account. 

This year alone, our Members have collectively saved or received refunds exceeding over $6.9 million by taking advantage of our Member-only offers and services. 

So, make sure you are aware of what you can get from the program and activate your account to access them. 

Final thoughts from us

Financial pressure can build quietly, and it happens to many of us at different points in our lives. The most important thing is recognising small changes early and giving yourself space to respond. 

With steady habits, practical tools, and the right support, you can strengthen your financial footing and feel more in control one small step at a time.

And we’ll continue bringing you clear, trusted guidance through Money Matters to help you stay informed, supported, and empowered along the way.

Sources:

• Financial Markets Authority - Good Cents: Savings & Debt Behaviour
• Centrix - Consumer Arrears Snapshot
• MoneyHub - Financial Stress Indicators & Guides
• Sorted - Financial capability tools
• MoneyTalks - Financial wellbeing and support services

Written by: Alan Sharpe

Alan is a key member of the HealthCarePlus leadership team. With over 30 years experience in marketing and customer service roles he is a passionate advocate for the union movement and HealthCarePlus’s mission to create real, lasting value for their members