In our recent Live Webinar: A Guide to Cutting Debt and Growing Wealth, we explored how Kiwis can take small, consistent actions to get ahead financially. Cutting debt faster and building long-term wealth aren’t about swinging for the fences - it’s about structure, discipline, and having a clear plan.
Why Cutting Debt Matters
Banks in New Zealand are making around $19 million a day, much of it from mortgage interest. For example, if you borrow $600,000 and take 30 years to repay it, you’ll pay an additional $540,000 in interest alone.
That’s why cutting debt faster is such a powerful strategy – it helps keep more of your hard-earned money in your pocket.
The first step is setting strong financial foundations:
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Creating a spending plan (not a restrictive budget).
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Making sure your KiwiSaver is working hard in the background.
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Protecting yourself with the right insurance.
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Structuring your mortgage to allow faster repayments.
By tackling debt early, you not only save on interest but also create opportunities to build wealth through property, managed funds, and investments later.
Building Wealth Alongside Debt Reduction
Once debt is under control, equity becomes a powerful tool. Equity – the difference between what your home is worth and what you owe the bank – can be leveraged to purchase an investment property without needing large amounts of cash upfront.
Repaying your mortgage in 15 years instead of 30 could save $344,000 in interest. Pay it off in just 10 years, and that figure jumps to $444,000 saved. Redirecting those savings into managed funds or property investments could see you more than $1 million better off by retirement.
The key message? Cutting debt and building wealth go hand in hand. With structure and strategy, small wins today can snowball into financial freedom tomorrow.
Practical Strategies to Cut Debt and Grow Wealth
During the webinar, several strategies were discussed:
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Increase repayments when rates drop: If your mortgage refixes at a lower rate, keep payments the same to pay down the principal faster.
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Revolving credit and offset accounts: Useful tools for disciplined borrowers who want flexibility and the ability to reduce interest.
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Equity for investment property: Using built-up equity as a deposit can accelerate wealth creation.
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Balance short-term sacrifice with long-term gain: Cutting debt faster means current-you gives up a little, but future-you gains financial freedom.
Key Takeaways
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Cutting debt faster saves hundreds of thousands in interest.
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A spending plan aligned with your goals helps you stick to the process.
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Building equity unlocks opportunities for investment and long-term wealth.
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Consistent small wins create momentum and financial freedom.
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Debt reduction and wealth building must be approached together, not separately.
Next Steps
Want to support your team’s financial wellbeing? Lighthouse Financial runs practical financial literacy workshops for workplaces across New Zealand. From KiwiSaver and mortgages to debt repayment and retirement planning, these sessions help staff build confidence with money and make smarter financial decisions. Book a workshop for your workplace today and empower your team to take control of their financial future.
If you’d like to learn more, check out these other episodes below.
For a no obligation discussion to see how we can help you on the path to wealth, please contact us.
Disclaimer:
The information in this article is general information only, is provided free of charge and does not constitute professional advice. We try to keep the information up to date. However, to the fullest extent permitted by law, we disclaim all warranties, express or implied, in relation to this article – including (without limitation) warranties as to accuracy, completeness and fitness for any particular purpose. Please seek independent advice before acting on any information in this article.
