Robynne Uerata-Tango was tired of just “surviving”. She wanted, and needed, to take control of her finances. So she enrolled in a basic financial literacy course taught through Open Wananga.
“I have always struggled with my finances and had no idea about it. I thought finance is only for the rich,” she said.
And that, says Carmel Fisher, managing director of Fisher Funds, is part of the problem. “As a country we don't understand what wealth is. We think it is only at the top end and we don't do anything until we get there.”
Retirement Commissioner Diana Crossan says a lack of financial education in New Zealand has made money a taboo topic. Her friends from the UK would be perplexed by job vacancies in New Zealand that do not list the salary.
“New Zealanders don't like talking about money. This is why we want to get the conversation out there and give people the vocabulary, allow people to understand the words,” Crossan said.
Median incomes in New Zealand fell 3 per cent between July 2010 and June 2011, according to the 2012 Household Incomes Report. Inequality reached its highest level ever as low earners' incomes fell and top income earners saw their pay packet swell.
The financial priorities for those at the bottom are increasingly short-sighted, says Peter Sykes, CEO of the Mangere East Family Service Centre. “There is no discussion about investment in long-term assets. There are many investments in bad debt - cars, accessories, sports equipment.”
The stigma and shame associated with being poor creates a negative resilience, says Sykes.
But in South Auckland, through one-to-one sessions at home, Uerata-Tango was able to take control of her money. It also gave her a reality check. She and her husband were running a property investment business that is now being closed down.
“It is somewhere I never should have gone. We were just throwing money at it. We got swept up in this business.”
She had to learn quickly how to make money go further but she is no longer frightened of finance.
“I don't look at money as something that is over my head any more.”
The course has a roll of about 2400 and an 85 per cent graduation rate. It makes a lie of financial management being something only for the wealthy.
The introduction of KiwiSaver has also helped change the face of wealth management. Fisher has seen many new investors since its introduction in 2007.
“I think KiwiSaver has improved the level of financial literacy and it has communicated why saving for retirement is a good thing.
“Three or four years ago the questions were ‘why would I join?' Now the question is ‘how do I manage my KiwiSaver better',” Fisher said.
She believes KiwiSaver can help change our approach to money and change the financial situation of many New Zealanders.
But an increased interest in money and financial management can close the gap only so far. There will always be a segment of society that can never afford to put something away for the long term.
To effectively reduce inequality, Crossan says raising income levels must be the priority.
“What you do with your income is important but you need to raise income first,” she said.
- Sunday Star Times