People are good. Life happens.

There is a phrase I use a lot at Money Sweetspot: people are good and bad things happen.

I know that's ridiculously simple for someone who has spent most of her career in finance. I started in audit at KPMG, moved into forensic accounting at the Serious Fraud Office, ran operations for a lender and have now spent several years building one. I realised this year that I'm no longer one of those 'youndg executives', and my grey heair and HRT prescription adds further evidence of unwavering support!

What that does mean is that I am phenomenally capable of making something unnecessarily complicated if given enough Excel columns and uninterrupted thinking time. In the last four years I have spent quite a few hours spinning wheels to nowhere- questioning my own intuition, skills, and at times, sanity!

The phrase "People are good. Life happens." popped in to my head in 2019 and has never left. And eventhough I've had periods of analysis paralysis, even after hearing thousands of people's money stories, that phrase keeps coming back up.

The story of debt isn't a surprise

The interesting thing about debt is that, when you look backwards, you can often see exactly how it happened. Debt very rarely begins with someone waking up on a Tuesday morning, bouncing out of bed, and deciding, “Excellent, today I shall financially overextend myself.”

I'e talked about it heaps, but it's still true.

Debt arrives at the doorstep on a Tuesday morning because of mundane unexpected things. The car. Then the dentist. Then a relationship ends. Someone loses some hours at work. The washing machine gives up after 14 years of loyal service at precisely the wrong moment. A credit card fills the gap because there isn't enough cash, then another repayment gets added to payday and suddenly something that made complete sense at the time has become quite hard to get out of.

And then finance people llke me tends to see the end result, which can be a declining credit score, increasing arrears and debt, and expenses that keep coming. Add on top of that a change in employment, which for many of our applicants has been a significant reduction in income and it can create quite the grey picture.

Those data points are all useful, and I'm not suggesting we throw the numbers in the bin and replace credit assessment with vibes and a good old story over a pot of tea.

But the numbers tell you what happened financially. They don't necessarily tell you what happened to the person.

I had a hunch back in that the distinction between those two things was where the opportunity would lie, and it's become even more important to me the longer we've built Money Sweetspot.

The impact of debt on a person

Over the past four years we've learnt that

• Somebody can have had a genuinely messy financial chapter and still be incredibly motivated to change it.
• Somebody with a good credit score can still be stretched to within an inch of their life.
• Affordability on a spreadsheet and financial wellbeing in someone's actual kitchen at 7pm are not necessarily the same thing.

And we've also learnt more than I ever expected that empathy doesn't mean saying yes to everything.

That's probably one of the harder lessons, because I naturally want to understand the reason behind things. Understanding somebody's story matters enormously, but it doesn't remove the need for boundaries, responsible lending or a plan that actually works.

In fact, I think real empathy sometimes looks like saying, “I completely understand how you got here, and I still don't think another loan is the right answer today.”

Empathy without boundaries is unsustainable

Commercially, that means that our business model hasn't been wildly successful over the past four years. We budgeted an approval rate of about 40%, and some months it's been much closer to zero, all the while we've continued to provide free financial education to over 10,000 Kiwi families, and absorbing the cost of the 'No' and 'Not Yet' without a way to cover those costs. You really do find what you stand for when your'e in such a financially constrained environment. It could have bene eaiser to raise interest rates, cut off our support, automate the no to a computer.

However, that would've gone against everything I stood for when I had the idea for Money Sweetspot back in 2019.

I still want Money Sweetspot to keep getting better at is everything in the middle. That means a continued focus on the journey of the no, and the what happened, what can change, and what gets you closer to where you're trying to go? because debt is rarely the actual Tuesday morning goal.

Four years has taught me boundaries, and not always in a good way. It's been a bit odd learning that by our financial reset not charging default interest and fees we fall to the bottom of a debt snowball payment priority when life happens. It's a really hard pill to swallow when we've made the model and the product with sole focus of supporting people out of debt.

It turns out that some people care less about that than we do. Over the past four years we've got better at finding the people, and customers, that care about that otucome, eventhough it takes work and is rarely a squiggly line. That means we've got more of an idea of what sustainable means for our business without throwing out the very reason I started this crazy journey.

So what do people want?

People tell us they want less stress. Savings. A home. More choices. To stop thinking about money every five minutes. To get through a supermarket shop without mentally moving three direct debits around.

Debt is often just the thing sitting in the way and I think finance could do with being a bit more curious about that, and a bit less convinced that a difficult chapter tells us everything we need to know about the rest of someone's story.

If you care about getting people out of debt, not just keeping them in it, I'd love to hear from you. This isn't a solo sport- it's a movement for the making.

Sasha

‍