Learning financial literacy early

ANDREW GORRIE/Dominion Post

COUNTING THE COST: Wellington High students Nita Blake-Persen and Matt Ammunson-Fyall are aware of their debt and spending - a pilot project will teach pupils the finer points of personal banking.

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Schools will teach pupils the finer points of personal banking, hire purchase agreements, savings schemes and interest repayments in a bid to make Kiwis more financially savvy.

The Retirement Commission has launched a pilot project it hopes will see money sense embedded in the national school curriculum by 2010.

Backed by the major banks, the scheme will start at new-entrant level but eventually include high school courses counting toward the National Certificate of Educational Achievement.

New Zealanders are poor savers, on average spending $1.14 for every dollar they earn, and currently owing more than $5 billion on credit cards.

Finance Minister Michael Cullen has repeatedly warned New Zealanders to spend less and save more. The Government's KiwiSaver scheme aims to get more people saving for their retirement.

Retirement Commissioner Diana Crossan said the initiative would help young people understand increasingly complex financial systems and concepts, which had changed rapidly in the past 20 years. Cash machines now gave 24-hour access to cash, and the use of loans and credit had become widespread and acceptable.

Pupils would learn how to manage their finances, about hire purchase contracts, interest rates, the ramifications of bad credit ratings, and the importance of financial planning and saving.

Financial literacy would be taught through existing subjects such as maths, social sciences and technology.

"All young people who come through the school system should have an understanding of the financial systems in New Zealand and the world, and an understanding of what money means in their lives and how they can manage it."

Banks are contributing more than $400,000 toward the pilot, which includes Scots College Prep, Tawa Intermediate, and Hampton Hill Primary School in Wellington and Brooklyn School in Nelson.

DOLLARS AND SENSE

Things were going well financially for Nita Blake-Persen, 17, till she racked up $230 in towaway and parking fines and slid into debt. "Things suck financially at the moment."

The year 13 Wellington High School pupil gets $100 a month from her parents, "and that's usually gone in about 2 1/2 weeks". Her parents pay her cellphone bill but she has applied for a supermarket job to earn extra cash.

Classmate Matt Ammunson-Fyall, 17, earns $15 a week teaching kapa haka and $42 from his parents for doing dishes, but is currently broke.

"Usually I'll blow it on clothes ... But I don't save. I'm going to be one of those people who are into credit cards and debt."

- © Fairfax NZ News