Kiwis top region for financial literacy
One silver lining to come out of the devastating Christchurch earthquakes is that they appear to have prompted Kiwis into improving their financial habits.
The latest research by payments giant Mastercard found New Zealanders were the most financially literate people in the Asia-Pacific region, tied in first place with Taiwan.
The country's index score of 73 was well above the region average of 67, and just ahead of Australia at 71.
MasterCard New Zealand country manager Albert Naffah said disasters like the Canterbury earthquakes had helped make Kiwis aware of the need to put money aside for a rainy day.
Four out of five respondents were now diverting more savings toward emergency funds, and two thirds were taking out insurance to prepare for the unexpected.
The proportion that recognised the need to save regularly also rose to 93 per cent, from 90 per cent in 2010.
New Zealanders money management skills, such as understanding day-to-day budgeting, keeping up with bills and tracking spending were the best in the region.
Naffah said Kiwis were "very smart and savvy users" of credit cards, pointing to a trend in recent years of debt repayments exceeding new spending.
However, Reserve Bank statistics tell a slightly different story. Of the $5.5 billion of personal credit card debt, the average interest rate incurred is 12 per cent, showing most do not pay off our balances in the interest-free period.
Despite New Zealanders apparent financial nous, the research also found less than a third of Kiwis had calculated their retirement funding needs. That ranked New Zealand the lowest in the region, said Naffah, and indicated there was still plenty of work to be done in the area.
The MasterCard Worldwide Index of Financial Literacy was based on a survey of 6904 adult respondents across 14 Asia-Pacific markets.
- © Fairfax NZ News
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