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Wednesday, 18 February 2009

When Did Solving Your Own Problems Become "Unreasonable"?

What is so "appalling" about tightening your belt and sorting out your own financial mess? Stuff reports:
Social Development Minister Paula Bennett is tracking down the Work and Income staffer who wrote to beneficiaries telling them to take out loans to cover their debts.
After being tackled on it in Parliament, Ms Bennett said last night she was "appalled" by the "totally unacceptable" advice ...
So what was that advice? The NBR reports it as:

* Taking out loans to cover arrears;
* Pawning cellphone and children's PlayStation;
* Ringing debtors to reduce payments or refinance debt; and
* Seeking budgetary advice.

Of course spun well the advice becomes 'go to a loan shark and deprive your children of their toys' but the letter never said that, despite the headlines and the title of the Labour Party press release.

I think the advice is pretty reasonable.

As a family going through a rough financial patch, due to my recent job loss and the need for Matt to retrain this year, we have very quickly run into financial difficulties as our income has significantly dropped.

The first thing we did was take a good hard look at our budget and asked ourselves what we could live without - cell phone costs were an obvious first choice but there were a lot of other areas too. When too many things hit us in one week we pull out the credit card and then immediately make a plan to pay it off which includes an assessment of what we could sell on Trade Me and what additional things we could all go without until it was sorted.

We don't have any HP's or loans currently, but in the past when we have we have and they have gotten on top of us, we took out a debt consolidation loan and we exercised the other advice above by contacting those we owed money to and seeing what we could sort out.

None of this is of course easy or pleasant. Sherry is most peeved that we cannot buy her a new pair of jeans until we get a week without any extra costs (and even then it won't be the brand she wants) and the kids all complain that we now never take them out for hot chocolates or to places you have to pay an entry to get in anymore and that dinner is never takeaways. We are all sick of mince night after night too - though threatening them with lentils shuts them up. It is going to get worse the deeper into the year we go; we have survived it before when we spent Matt's PhD years living on a $20,000 p/a scholarship in Dunedin so we know what is coming - the lentil threat is not an idle one.

The case worker wrote the letter in question in the context of having granted the person financial assistance; it wasn't like the person was refused help. I mean, if you want a handout then I fail to see how you get to complain about getting a how-to-manage-your-money-better lecture.

Personally I wouldn't advise anyone to pawn their possessions because the money you get isn't great and the interest rates are steep but the general idea that you give up some of your less necessary items to get yourself out of the hole is not unreasonable. I am not saying sell the shirt off your back but then neither was the case worker.

Kids don't need PlayStations, adults don't need cellphones. I don't begrudge anyone on a low income having these items as we don't know the circumstances they got them in, they may have been gifts, bargains picked up on Trade Me or might have been purchased when the family was financial but you have to be able to recognise them for what they are - luxuries.

Sheridan knows that if she cannot pay for her horse this year, then she has to sell him as we cannot bail her out. Non-essentials can always be replaced no matter how attached to them we might be.

Before you put your hand in someone else's pocket would it really kill you to tighten your own belt first? People not on WINZ benefits do the sorts of things mentioned in the letter off their own bat to sort out their own messes so why shouldn't those on benefits.


  1. The StP opportunity was a non-starter?


  2. If you think lentils are threatening, you obviously haven't tried my wife's lentil cottage pie. It is better than most people's mince cottage pies—even the good ones (: I could email you the recipe if you like.

  3. The StP thing is still in progress.

    I love lentils, it is just the rest of them that 'think' they don't like them.

    By all means email the recipe though, I am always keen to expand my budget cooking repertoire.

  4. If people have a right to a benefit then the provider of that benefit has to give it to them without passing judgement or offering any advice.

    If people don't have a right and a benefit is a charitable gift to help someone who has fallen on hard times then the giver is absolutely within his or her rights to attach some advice.

  5. Scalia - benefits are not a right - they are an entitlement, at the discretion of the state. Unfortunately, so many people have taken advantage of that entitlement that they have forgotten how to stand on their own two feet. I have blogged several times on the blight affecting New Zealand a condition caled "Entitleitis" whereby the sufferer has become so reliant on state support that he/she has lost their sense of self-reliance.

    As for your assertion that the payer of benefits can't advise the payee on how to spend it, I disagree - the state has not only a right, it has a responsibility to ensure that benefit money is spent appropriately, on core expenses first such as housing, food and clothing before luxuries are bought.

  6. Entitleitus! I love it.

    Knowing Scalia as I do I am confident that his position will be closer to the second argument he sketched.

  7. You know you could do a cooking with MandM segment and test out recipies and the like.

  8. Not sure how much demand there would be for that, I tried Bnonn's wife's lentil recipe and it went down well, the kids really enjoyed it too but I am not sure MandM is the kind of blog one would expect to find a cooking section on.


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