AnySelected

New Zealanders are being urged to think twice about racking up debt to maintain a certain image online, with financial experts warning that seemingly small, regular spending can lead to decades of repayments and missed investment opportunities. The message comes as many Kiwis grapple with rising cost of living and the pressure to project a successful lifestyle on social media.

The Consumer Affairs (CA) has issued a stark warning against the 'swipe now, pay later' mentality, highlighting how easily everyday spending, often driven by a desire to impress others, can spiral out of control. It's a particularly pertinent issue with the rise of Buy Now, Pay Later (BNPL) services, which make it incredibly easy to access credit without fully appreciating the long-term implications.

Let's break it down. Consider a common scenario: spending $500 NZD (roughly equivalent to the original Indian Rupee figure) per month on things like new clothes, eating out, or entertainment - all to keep up appearances. While $500 a month might not feel like a huge amount, it quickly adds up to $6,000 NZD per year. The problem? This spending generally provides no tangible return. It's gone as soon as the purchase is made.

Now, let's compare that to investing. Imagine investing that same $500 NZD per month into a Systematic Investment Plan (SIP) – a popular way to invest in the stock market. Over a 20-year period, that consistent investment could potentially grow to well over $300,000 NZD, depending on market performance. That's a significant difference!

“It’s about understanding the trade-offs,” explains a financial advisor. “That $500 a month could be working for you, building wealth and security for your future, instead of simply disappearing on fleeting purchases. The pressure to project a certain image online is real, but it’s crucial to prioritise your long-term financial wellbeing.”

Here's what New Zealanders should consider:

• Track your spending: Where is your money actually going? Use budgeting apps or spreadsheets to get a clear picture.
• Differentiate needs from wants: Are you buying something because you truly need it, or because you feel pressured to keep up with others?
• Explore alternative options: Can you find more affordable ways to enjoy life without going into debt?
• Consider investing: Even small, regular investments can make a big difference over time. Talk to a financial advisor to explore your options.
• Be mindful of BNPL: Understand the terms and conditions of BNPL services before using them. Don't treat them as free money.

The CA’s warning serves as a timely reminder that financial security is more important than fleeting social media validation. Don't get trapped in a cycle of 'swipe now, pay later' – plan for your future and protect your financial wellbeing.