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Young New Zealanders still lack knowledge in budgeting, saving and investing according to the Westpac Massey Fin-Ed Centre 2015 Student Financial Health Check. The survey of nearly 300 16 to 19-year-olds was developed in conjunction with high school teachers to test the competence levels of students across a range of personal finance areas.
The average score for questions relating to budgeting and financial management was only 37 (out of 100). The next lowest average score, at 45, was for saving and investing.
“These are two very crucial areas for young people to come to grips with if they are going to put themselves onto a path of financial wellbeing,” says Westpac Massey Fin-Ed Centre director Dr Pushpa Wood.
“If they don’t know how to budget well, they will not have money to save. And if they don’t understand how best to grow their savings, then that will have a long-term impact over their lifetimes.”
Westpac NZ acting head of investments and insurance Nigel Jackson says the results underline Westpac’s long-held belief that financial education should be a compulsory subject in New Zealand schools.
“Every student should have a basic understanding of financial management by the time they leave school,” he says. “It’s never too early to get in the habit of setting long-term financial goals and strong budget management through the student years can make a real difference after graduation.
“While we’d expect students to be less focused on saving and investing, simply having a KiwiSaver account for after graduation could play an important role in long-term financial security.”
The survey respondents scored best in the areas of identifying and managing risk and understanding their rights and responsibilities.
“It’s great that kids seem to understand their rights and that they are able to identify risks,” Dr Wood says. “It seems that this age group is much less likely to fall victim to a scammer than our senior citizens.”
Dr Wood says that she would rate young New Zealanders “a five out of 10” for budgeting and saving.
“That’s what our survey is telling us – ideally it should be closer to seven or eight so they can have a good start to their adult life.
“An important stepping stone in achieving financial education is for families to start having conversations about money and budgeting for ‘wants’ at an early age. The sooner we can engage our children in money conversations and help them understand the importance of a savings plan for their future, the better prepared they will be to make good decisions.”
To help get young New Zealanders onto the right path, the Westpac Massey Fin-Ed Centre will launch a free online course for all new Massey University students at the start of the academic year. It will be divided into separate areas dedicated to those living at home, living on campus or flatting.
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Created: 23/02/2016 | Last updated: 23/02/2016
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