Published on 3rd of November, 2023
CMM Financial Mentor and Incentive Saver programme designer Linda Smith notes that 39% of Kiwis don’t have any emergency savings and that 20% could cover their living expenses for only a week or less if they lost their job.
“Many people in New Zealand are struggling to manage their finances and normally have little or no savings for a rainy day,” says Linda. “A lack of emergency funds leads to further financial difficulties and debt. This in turn results in increasing debt, loans being obtained through high interest lenders, KiwiSaver hardship applications, and Insolvency procedures for many people.”
Linda designed Incentive Saver to address this issue, offering a practical approach that starts people on their savings journey. Since the programme was launched, 20 savers have completed the programme and there are 23 active savers with seven in the process of coming on board.
“Initial results show that after six months 80% of those who completed the scheme are still saving regularly,” says Linda. “Participants report several positive changes, including having emergency savings, having funds on hand to do things they or their family find enjoyable, feeling able to encourage other people to save, and being motivated to continue their savings habit.”
Feedback from one participant sums up just how transformational the programme is: “The stress has gone–everything I need is covered now. I sleep better. It’s definitely been a big change and I would recommend it to everybody. It should be compulsory!”
Linda says that despite its success, ongoing funding is a challenge and that this is the main constraint on expanding it as more participants would require additional facilitators.
