As a rule of thumb, it’s typically not great to be using credit for everyday expenses like food or petrol – borrowing to get by, basically.

But as living costs get pricier, it’s easy to see how it might seem like a good idea to use credit cards or Buy Now, Pay Later for items like groceries. At first the goal may be to rack up rewards points on a card, or simply to smooth out payments, but it can quickly head downhill.

The more debt we get into, the harder it is to get out. So it can be a bit of a red flag if we’re using debt for everyday essentials.

How borrowing spirals out of control

Say you are bulk buying meat for your family. If you’re spending $80 in total using Afterpay or Laybuy (insert your preferred Buy Now, Pay Later company here) across four payments, it only feels like $20 for the moment, and handling three other $20 repayments seems entirely doable.

Sounds okay, doesn’t it?

But things change, and that’s the risk that comes with debt – we make a borrowing choice in one moment, but then reality shifts in the next. Perhaps you’re unexpectedly welcoming guests at home, or extra hours at work suddenly dry up. The food can run out before the repayments have, and of course everyone still needs to eat!

How to steer clear of relying on credit for everyday items? I spoke with some recent participants in Pacific Peoples Pathways – a programme helping people buy their homes – on how they manage these days, with rising prices squeezing everyone’s budgets.

When costs creep up on us

“I think the cost of living has gone up quite dramatically,” says Avnita, who works at a tertiary education provider in Auckland. “Everything has gone up except for wages.”

One area where it’s become most apparent is buying food for her 2-year-old Rottweiler Chino. “We have a big dog who eats a lot,” she says. “Pet food has gone up by $10 per bag, so overall you’re paying about $70–80 extra per week.”

“When you look at your expenses, his food costs more than our human food!” Taking into account dog roll, dry food and raw food as well, she’s had to cut back and switch brands. “It all adds up. You’re better off buying drumsticks.”

Another area is petrol, and Avnita has a regular commute driving. So she tries to combine errands in order to spend less on transport. “If I’m going food shopping, what else can I do on my run to avoid going in and out?”

When it comes to avoiding borrowing on everyday items, she has some key tips. “I know it’s hard, but try to switch to cheaper brands. Plan your day and week by what you need to do, so you don’t waste on things.

“Try to save at least a few dollars, rather than paying all that interest to a loan shark. Save that money for a rainy day, and I think that will go a long way.”

Hack the food supply chain

Augustine was someone who “chased shiny objects” (as she put it) in her twenties, filling up one credit card and then another. Then she moved to Rarotonga, and life changed.

“In the Cook Islands, I realised we don’t need many things. There, if you don’t have it, you don’t buy it.”

She was there for 12 years, and upon returning to New Zealand with her family, she found that many things had changed, including the arrival of Buy Now, Pay Later options like Afterpay, Laybuy or Zip. She tried one, but decided she won’t do it again.

“You can get tempted to the dark side, like Darth Vader,” she laughs. “But if you’re going to be a Jedi… it’s all about refining the art of where I spend my money. Now it’s like: this is what I really need.”

Refining that art really took off for Augustine during the second Covid lockdown, when she took a good hard look at the food supply chain: she became vegan and learned to grow her own food. “I bought two plants a week as seedlings and slowly started planting,” she says. “Soon I had a functional garden where I could grow stuff.”

This has allowed her significant savings that keeps her from needing to borrow for everyday expenses. Where she previously would spend $80–$90 a week, for example, today it’s typically just $10 – basically for just “a cucumber, which is ridiculous, and a bag of apples.” More and more, she’d like to move away from “cupboard fillers” – processed foods that are so dependent on the supply chain.

Augustine’s advice is to get help where it’s available, and don’t be shy to reach out to friends for support. “If you cannot get the essentials and think you might get a loan, eat a bit of humble pie, don’t take the extra cash if you can. Only take what you need.”

These days she’s continually putting out kale, basil, bottle gourds and lemons from her garden for those who need it. “Sometimes you never know who walks past. No one is immune.”

Try the 50-20-30 budget, or another split that makes sense for you

Lena is a registered nurse at an Auckland hospital, and had used Afterpay, Zip and Oxipay a fair bit, as well as Flight Centre and Airpoints credit cards. Then she got financial advice to limit their use, and made some changes.

She’s seen friends feeling out of control with their purchasing. “If you can’t trust yourself with those sorts of purchases, close it out,” she says.

“Growing up, my parents weren’t really good with budgeting, with their money. They spent quite a lot on the community, on the family.”

These days she is all about forward thinking, and building a stable environment for the future. “I don’t want to be in that situation. I learnt from their mistakes.”

How best to do that? She’s a fan of the 50-20-30 rule.

“I spend 50% of my income on my needs (bills, rent, insurances, etc), 30% on my wants and 20% on my savings,” she explains. When her pay comes in, she already has calculated how much will go to each of those three areas.

“I stay committed to this rule, as it has avoided a lot of extra spending, some of which was unnecessary. I have found that as my pay varies depending on the amount of hours I work in a week, I have extra cash to for my wants and savings.”

If you’re interested in giving the 50-20-30 a go (or another split that works for you), the first step is to figure out what you’re currently doing. Our budgeting tool is a great place to start.

If you’re looking for places to trim here and there, it helps to keep your spending as happy as possible. Here’s more on how.

As you adjust your spending plan – which is really all a budget is – you can see what percentage of your income you’re spending on needs and wants, and how much is flowing into savings and towards your goals.

It’s a sure way to steer clear of borrowing for everyday items.

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