Money—it’s something we all use daily, but it doesn’t come with a manual. It’s super easy to slip into bad habits, especially when life gets hectic or unexpected costs pop up. At Loansmart, we see it all the time: Kiwis getting caught out by common money mistakes that end up costing more in the long run.
Here’s the good news: most of these slip-ups are totally avoidable. And we’re all about helping you make smarter financial choices. So let’s run through the five most common money mistakes and how to steer clear of them.
1. Not Having a Budget (Or Ignoring It)
Yes, budgeting is hard and often it seems like such a chore. But flying blind with your money is a recipe for stress.
Why it’s a mistake:
If you’re not tracking your income and expenses, it’s very easy to overspend without realising. That’s when the credit card bills pile up and suddenly you’re wondering where all your pay went.
How to avoid it:
Start by writing down everything you earn and spend in a week. There are free budgeting tools online (like Sorted.org.nz) or you can just use your phone’s notes app. Keep it simple! Once you know where your money is going, you can spot areas to cut back—like daily coffees or unused subscriptions—and put that cash to better use.
Loansmart Tip:
Creating a budget helps you free up funds for things that actually matter—like smashing your debt or saving for something big. To learn more, check out our blog Simple Budgeting Tricks Kiwis Swear By.
2. Relying Too Much on Credit Cards or Buy Now, Pay Later
Credit cards and BNPL services (like Afterpay) seem handy. But they can quickly turn into a trap if you’re not careful.
Why it’s a mistake:
These services make spending feel painless—but that “small” purchase can turn into a mountain of debt if you’re not paying it off on time. Interest and late fees add up fast, and next thing you know, you’re stuck juggling repayments.
How to avoid it:
Try the old-school trick of using cash or a debit card for day-to-day spending. If you do use credit, make sure you pay it off before interest kicks in. And always read the fine print on BNPL platforms.
Loansmart Tip:
Already juggling high-interest debt? A debt consolidation loan could roll it into one manageable repayment, often at a lower rate.
3. Not Saving for Emergencies
Life’s full of surprises—like the car breaking down or an unexpected dentist bill. If you don’t have a buffer, you might end up needing a loan or racking up more debt.
Why it’s a mistake:
Living payday to payday with no safety net means any little hiccup becomes a big financial drama. This is when people turn to predatory short-term lenders or high-interest credit options just to stay afloat.
How to avoid it:
Start small. Set up an automatic transfer—even just $10 a week—into a separate savings account. That way, the money builds up without you having to think about it. Aim for a goal of $500 to $1000 as a starter emergency fund.
Loansmart Tip:
We’re all about giving you breathing room, not extra pressure. Setting up a buffer gives you peace of mind and stops panic borrowing.
4. Making Only the Minimum Repayment
Minimum payments might seem like an easy way to manage debt, but they can also be the slowest (and most expensive) way to pay things off.
Why it’s a mistake:
When you only pay the minimum, especially on credit cards, most of your money goes toward interest—not the actual balance. That means it can take years (literally!) to clear what started as a small debt.
How to avoid it:
Try to pay more than the minimum—even an extra $20 a week can save you heaps in interest. If you get a loan, get one with a fixed term and repayment plan, so you know you’ll have it paid off within a certain length of time. Better yet, if you’ve got multiple debts (credit cards, car loans, hire purchase), consider combining them into one easy repayment.
Loansmart Tip:
At Loansmart, we specialise in smart debt consolidation. One loan. One repayment. Less stress.
5. Not Comparing Your Loan Options
When you’re in a hurry or feeling the pressure, it’s tempting to just go with the first loan offer you get. But that can seriously cost you.
Why it’s a mistake:
Not all loans are created equal. Interest rates, fees, and repayment terms can vary massively between lenders. Picking the wrong one means you could be paying way more than you need to.
How to avoid it:
Take the time to shop around—or better yet, let us do it for you. At Loansmart, one quick application gives you access to multiple lenders. We’ll compare rates, terms, and options to find the right loan for your needs.
Loansmart Tip:
We look at your full situation, not just your credit score. That’s how we help more people get approved faster—with fairer rates too.
Be Smart With Money, Not Stressed
No one’s perfect with money. We all make the occasional splurge or forget to save. But the key is learning from those moments and setting yourself up to do better next time.
At Loansmart, we’re not just here to lend money—we’re here to help you take control of your finances. Whether you need a loan to get back on track, want to consolidate debt, or are just looking for advice, we’ve got your back.
- Apply online in 2 minutes
- Get personalised options from trusted lenders
- Enjoy fast, professional, 5-star rated service
Need help sorting out your finances?
Apply now or give us a call for a quick, friendly chat. You’ll get smart loan solutions without the hassle.
Need more tips like this?
Check out our blog for more helpful reads on budgeting, debt, saving, and smart money moves!
