BEYOND REASONABLE DEBT: A BACKGROUND REPORT ON THE INDEBTEDNESS OF NEW ZEALAND FAMILIES

This paper reviews international literature and New Zealand data to examine the indebtedness of New Zealand families and identify circumstances and behaviours that might distinguish families who use debt well from those who do not. Some circumstances (notably being young, having children and separation) and some behavioural traits (basing aspirations on comparisons with others and being impulsive) appear to be important in determining who gets into debt. Other circumstances (notably having low income) and other behavioural traits (having an external locus of control) appear to be important in determining who gets into problem debt. Having an external locus of control means you believe your environment or other people control your decisions