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Financial Literacy in Children

SchoolFinancial Literacy in Children

The OECD has recently released the results of a survey of financial literacy skills and knowledge for 15 year olds in its member countries. Overall, New Zealand students have a relatively high level of financial literacy when compared with other countries, with 1 in 5 having advanced skills and knowledge. Financial education is now more widely available in New Zealand schools, and only 30% of students were in schools where financial education is not available, compared with the OECD average of 48%.

The level of financial literacy is closely linked with:

  • Skills in maths and reading
  • Whether students have a bank account (regardless of how much is in the account)
  • Gender – fewer girls have advanced financial literacy skills than boys
  • Having at least one parent with a tertiary education or a skilled occupation
  • Students’ experience with money matters and how often they have regular discussions with parents about money
  • Socio-economic status and ethnicity

These results reinforce the need for financial education to take place both in schools and in the home environment. It would seem that schools should be focusing in particular on girls, students from low socio-economic groups and ethnic groups with low levels of financial literacy.

Within the home, it is important to give children experiences with money, to allow them to have their own bank account and make decisions about what they do with money. When they are very little, start by talking them about making choices with money. At school age, set up a bank account for them and allow them to have money to use as they please, while continuing to talk to them. Gradually increase the amount they are responsible for so that by the time they leave home, they are able to manage a full personal budget.

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Make a Date With Your Money

MoneyWeek2013Small logo JPGMake a Date With Your Money

Money Week 2013 is coming! After the success of last year’s Money Week, the Commission for Financial Literacy and Retirement Income is once again encouraging us all to take some time in the first week of September to have a look at how we are managing our money. Money Week is a week-long series of financial events and activities around the country, the aim of which is to motivate people to take stock of their personal money situation and to make changes if needed. Organisations throughout NZ are being challenged to get involved in Money Week by running an event or activity that engages with people and their money. Financial institutions, schools and tertiary institutions, community groups and employers can all become involved by running money-themed events.

Workplace seminars during Money Week are becoming increasingly popular. Good employers see the link between good money management and employee satisfaction. Happy employees mean higher productivity and lower staff turnover. There are a number of facilitators who are accredited by the Commission to offer Sorted Seminars covering such topics as goal setting, budgeting, managing debt, saving and investing, KiwiSaver and retirement planning. A full list of facilitators throughout the country is available on the Sorted website.

Members of the public will be able to get free financial advice during Money Week by calling the Institute of Financial Advisers (IFA) to register for an appointment. More information is available on the IFA website.

Money Week is a great initiative for bringing attention to financial literacy and is deserving of support from every individual and organization in the country through either running or attending an event. A list of registered events can be found on the Money Week website. Mark your diaries now for Sunday 1 September to Saturday 7th September.

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Turn Financial Knowledge into Action

JumpTurn Financial Knowledge into Action

While New Zealanders in general have an excellent grasp of basic financial concepts, a recent survey has found that they are not so good at putting into practice what they know. The survey, undertaken by the Commission for Financial Literacy and Retirement Income with the support of ANZ, ranked New Zealanders well ahead of other OECD countries on financial knowledge. However it also shows we have a long way to go to get people engaging in financial behaviour that will help them achieve their financial goals. For example, while 85% of those surveyed know what a budget is, only 61% have one.

Banks, family and friends and the Sorted website are popular sources of financial information but a possible reason for the lack of action is that many people struggle with how to translate general information into something that suits their own specific needs and circumstances. Putting together a budget, let alone a financial plan, can be a complex process involving setting goals, analysing spending, calculating income and the amount of saving required to achieve specific goals.

Building your financial future is no different than building a house in that you are much more likely to succeed if you have a plan drawn up, with the assistance of an expert, to show how everything is supposed to fit together. Every plan is unique as it depends on individual goals and circumstances. There are a number of reasons why people don’t have financial plans:

  • Lack of familiarity with using a financial planner
  • Lack of understanding of the value of a financial plan in comparison with the cost.
  • A  shortage of qualified financial planners who are authorized to give advice

These are all obstacles that need to be dealt with so that financial knowledge can be turned into action.

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Money Week

Manage Your Money Better

Money issues are top of mind for most people, usually in the sense of worrying about money. Just like those piles of work papers that aren’t yet dealt with or the list of things that need doing around the house, money issues can drain your energy if they are not sorted. That’s why every now and then it’s a good idea to really focus on money, address the issues and learn ways of managing it better.

The Commission for Financial Literacy and Retirement Income has launched the first annual Money Week, a week-long series of financial events and activities around the country, the aim of which is ‘to raise awareness of how people can better manage their money and get help as they do that’. Organisations throughout NZ are being challenged to get involved in Money Week by running an event or activity that engages with people and empowers them to take action to better manage their everyday money. Financial institutions, schools and tertiary institutions, community groups and employers can all become involved by running money-themed events. A list of registered events can be found on the Money Week website. Members of the public will be able to get free financial advice during Money Week by calling the Institute of Financial Advisers (IFA) to register for an appointment. More information is available on the IFA website. Other planned events include investment seminars, budgeting workshops, radio broadcasts on financial literacy, guided tours of the Reserve Bank Museum and lunchtime seminars at workplaces.

This is a great initiative for bringing attention to financial literacy and is deserving of support from every individual and organization in the country through either running or attending an event. So when is Money Week? Sunday 2 September to Saturday 8th September. Mark your calendar now!

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First Train the Teachers

First Train the Teachers

Financial management skills are best taught at a young age, however despite the development of a curriculum for financial education, few schools have taken up the opportunity to teach kids about money, claiming lack of resources and a crowded curriculum. There is another very significant barrier to financial education and that is the lack of financial skills in teachers themselves. Teachers at all levels of our education system have an important role to play in improving financial literacy and they need to be properly trained and resourced to carry out this role.

An exciting new pilot programme is about to get underway which will train tutors from Whitireia Polytechnic so they can acquire the skills and resources needed to deliver financial education. This initiative arose from a joint research project between the Commission for Financial Literacy and Retirement Income and Visa to explore ways of increasing the quality of formal financial education. The research was based on a survey of a number of institutions involved in trade training and the provision of community services. It showed that tutors in the surveyed institutions tended not to have specific expertise in the content or processes of financial literacy. Often, they relied on their own personal experience of financial matters. Less than half had received training or professional development and what they had received was not exclusively linked to financial literacy. When providers were asked why their teaching staff had not been trained or offered professional development, the common response was that it was due to professional development opportunities not being available. The conclusion of the research is that there is a pressing need for professional learning and development for teachers in formal financial education. If we want to see good quality financial education in this country, we must first train the teachers.

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