New Zealanders are being warned to watch their spending amid fears the country could be on the brink of a debt crisis.

Two major lenders are warning our household debt to income ratio has now reached 162 percent, which is higher than before the global financial crisis.

Westpac and ANZ say our economy is strong, but growth is underpinned by unsustainable house prices, population growth and the Canterbury rebuild.

Hannah McQueen from financial advice service Enable Me told Mike Hosking we're living in a bubble that will eventually catch up with us.

"These are our good years, so you need to be making progress during the good years and most of us don't."

McQueen said people "fritter" away about 15 percent of their after-tax income.

Often the things they're spending money on don't make them any happier, and they often don't know they're spending it.

"If people can find the fritter, they can get ahead a whole lot faster, they don't have to earn more money and the banks don't need to offer them cheaper interest rates."