It’s part of our culture to give. Often, however, we simply cannot afford to. So we look to the younger, barely-legal-to-borrow-money family members to contribute. But they do so in ways that unwittingly set them up for a life of spiralling debt. LAUMATA LAUANO reports on the lack of financial literacy amongst our young adults, who find themselves in a mountain of growing debt with little to no financial savvy to get themselves out of it. She also shares her own personal story of spiralling debt from a young age



Our people, no matter what Pacific nation, are known for operating in the collective. In times of struggle or need we come together, encouraging a sense of community and reciprocity.


It’s a beautiful concept that works when everyone contributes within their means, or helps each other out financially.


It takes a village to raise a child, as they say.


But while it takes a village to raise a child, the village doesn’t often pay an individual’s debt accrued to help raise said child, or put in for fa’alavelave, the Samoan word for donating money for unforeseen events that require monetary donations such as a funeral, birthday or wedding.


Most of the time, debt accrued for the collective is paid off by an individual. In many cases, that individual is young and barely understands what credit or interest even is, let alone the impact these two words will have on their life going forward.


Often, a young Pacific person’s first dalliance with financial decision making is through loans made for the greater good of the family, or for a family member who can’t take credit out in their own name because - as you may have guessed - they already have too many loans of their own.


According to Peter Cordtz, Manager of Community Education at the Commission for Financial Capability (CFFC), stats show the 16-24 bracket is when people start to make important financial decisions which follow them.


“It impacts them in later life, in ways they might not know or realise,” says Peter.


“For instance, their credit rating ruining their job prospects.”


I was 18 years old when I took out my first loan.


I may have still been in my school uniform when I went to the bank with a family member to sign the loan contract with the bank. That wasn’t the only loan I was to take out for the sake of others.


I’m still paying it off, as it had been topped up a few more times for the sake of various fa’alavelave.


I have also had two maxed credit cards, one of which I’m still paying off, and three loans from three different creditors, which have all been topped up at least once since. Of the once 34k personal loan debt I’ve been paying, less than half of it is related to anything I was involved with.


Until very recently- when I acquired the help of an organisation who specialise in helping people out of debt- I had lost all hope that I would ever be free of the debt weighing me down.


I’m not alone.


A growing number of young Pacific people are accruing debt in their name for other people. It poses an intergenerational risk created by our commitment to collectivism.


“We are all in debt that isn’t ours,” says one Samoan man in his early 30s, who wanted to remain anonymous.


“When your parents don’t have any form of savings, you put your homeownership goals on hold while you help them get out of the debt hole. It feeds into our low numbers of Pacific home-ownership.”





  • According to Statistics NZ figures, declining home ownership rates have been worse for Pacific and Maori than the rest of the population
  • Since 1986 home ownership has decreased by more than a third (34.8%) for Pacific people, 20% for Maori and 15.3% for the total population
  • Pacific people have fewer mortgages proportionately but with higher levels of debt on average.
  • The 16-24 years age bracket is when people start to make important financial decisions, but the best time to start teaching people about making good money decisions is between the ages of five to 18
  • The Commission for Financial Capability (CFFC) is rolling out its Sorted in Schools financial education programme to secondary schools throughout the country. It is free and linked to a number of different subjects so all students can benefit. CFFC is also working with the Ministry of Education (MoE) to ensure money know-how is included in the School Leavers’ Toolkit.


Pacific people have the lowest levels of homeownership and highest levels of debt relative to the rest of New Zealand (including Maori).


The Stats NZ Household Economic Survey in 2018 includes a breakdown of assets and liabilities by ethnic group.


The data shows that Pacific people feature in the lowest proportion of homeowners. While the mean value of that asset is higher for Maori, this also reflects the number of Maori in living regional/rural settings relative to the proportion of Pacific people in cities (and possibly also average dwelling size).


The liability line shows Pacific people with fewer mortgages (proportionally), but with higher mean levels of debt.


“I’m about 30k in debt,” says one 27-year-old Samoan woman, who was 24 when she took out a $17,000 loan for a family member’s car.


With two other personal loans in her name, from two different finance companies, she is still paying off the debt.


These decisions are made with little to no information about how it all works. In some cases, you’re told not to worry and that the loan is under your name, but repayments will be taken care of. You’re told to smile and nod while contracts are being drawn up.


We answer questions we’re asked by creditors and banks with, ‘Yes, I have a job and this is how much I make, so I’ll be able to make the payments’.


We don’t question why our older family members can’t take out any more loans. We just sign on the dotted line after confirming we understand and agree that lenders are operating under, and adhering to, the Responsible Lending Code.


Even if you don’t understand and even if they are not adhering to the code.


Peter says it’s why financial education is so important.


“It’s a life skill and should be treated as such, and not left just for those who want to take up those particular subjects in school and as a career,” says Peter.


“The fact that the first significant debt decisions are being made by young people in their teens is why the Sorted in Schools programme is focussing initially on secondary schools.


“By normalising financial education across the curriculum, it doesn’t matter whether our kids go into social sciences, arts, trades or anything else for that matter, understanding how money works helps them build long-term wellbeing.”



The long term objective is to normalise financial education across the curriculum at all ages, because those earlier age-groups that are learning - and the resulting behaviours- are embedded for life.


The hope is to improve long term outcomes for entire communities and possibly bring about generational change.


“There’s a need for demystifying or destigmatising the idea of talking about money with their children,” says Peter.


“Because if I had taken the knowledge gained from such programmes to my Samoan father (who hails from Magiagi) and Maori mother (of Ngati Wai / Ngati Hine descent) I would have been called a fiapoko (know it all) and told I’m speaking on matters beyond my station.”


The CFFC believes in the need for a wraparound approach when it comes to our Pacific communities and families and financial education.


There needs to be a larger conversation with community leaders. Minister of Pacific Peoples ‘Aupito Su’a William Sio agrees that Pacific leadership has an important role to play as part of the solution to addressing such challenges as a community.


Our Pacific people operate as a collective in many cases, so without the family/community conversation, successes will be isolated and won’t necessarily address the issue on the scale it needs to be.



If you’re struggling to get out of debt, reach out, here are some services below which exist to help people manage their debt.



It is a free service powered by CFFC, dedicated to helping New Zealanders get ahead financially.



Support to all budget advice services in New Zealand. We provide budgeting services with all the resources they need to help clients safely and confidentially.



It is a free service that collaborates with churches around the nation to tackle debt, poverty and its causes for New Zealand families


This article was first published in Issue 73 of SPASIFIK Magazine, out now.