How New Zealand Schools will Benefit
It is imperative New Zealand children are given a better financial education than their parents. If we don’t provide this, we run the risk of creating a whole generation shackled by debt with no hope or understanding of how to get out of it.
In these days of instant gratification, many school students haven’t had to struggle to earn money. They are simply given it or think that it appears by magic from the “hole in the wall.” The risk is that they develop bad spending habits, believing the money will always be there as they rack up student, personal and household debt.
Less affluent students are less likely to have experience with, or positive role models for, saving and investing. They spend what they earn, not realising there is a way forward financially to improve their lives.
Regardless of socio-economic background, MoneyTime (NZ)’s research in schools reveals few students understand how people manage to buy houses, which cost many times their annual income or the importance of avoiding high interest debt. An even smaller percentage have any idea about investing and how to make their money work for them.
“Knowing how to invest is becoming increasingly important.”
Fifteen years ago (2004) the median house price was four
times the median gross household income. It’s now 6.5 times
the median gross income. In Auckland, fifteen years ago the median house price was five times the median gross household income, and it’s now nine times the median gross income! It’s
no wonder the number of first home buyers is dwindling! Most people struggle to consistently and sustainably increase their net wealth through employment, so knowing how to invest or run a successful business is crucial.
During the 18 months we spent researching and developing
the MoneyTime online financial literacy programme, parental feedback was unanimous. Without exception, the 200+ parents canvased about their children’s financial literacy thought more could be done in schools to teach it. Parents of today’s school children were not taught financial literacy and they are keen for this to be different for their children.
Many teachers recognise the need and do their best to fit it in, making the most of their own financial knowledge. But there is a strong case that this doesn’t go far enough to teach a subject that will impact significantly on the life of every single student. In this respect, Financial Literacy is arguably as important as English and Maths.
The former Retirement Commissioner, Diane Maxwell, picked up on this on Seven Sharp in 2017. She said she felt financial education should be part of the school curriculum alongside Maths and English and that it should be coordinated nationally. She said, “What I would love to see is financial capability embedded in the curriculum, being taught by the teachers and being measured as part of the overall school outcomes.”
That makes sense to me and no doubt, many financially challenged parents, but how do you feel about that? Chances are, it might make you uncomfortable if you weren’t taught financial literacy yourself. However, if you can find a teaching resource that does the teaching for you, especially with respect to buying property, investing and business, then you have nothing to worry about and your students will be set up with an understanding of how to not only survive financially, but to avoid the drag of high interest debt and become financially successful. You will have done your job of preparing your students for life, despite Financial Literacy being an after- thought in the curriculum.
