Young Kiwis not saving for a rainy day

JAZIAL CROSSLEY
Last updated 12:17 19/11/2012

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New Zealand's young adults know how important it is to save, but less than a quarter think long term financial planning is important.

The first results out from Massey University and Westpac's 20 year longitudinal study on financial education showed that 77 per cent of 18-22 year olds did not think it was important to make money plans for further than four years in the future.

Of the 300 young New Zealanders surveyed, less than half did not give any thought to their money management.

Parents were the sole source of financial education for 66 per cent of respondents and most of those said their mum and dad were good role models for money.

Massey University senior lecturer Dr Claire Matthews said the young people surveyed were ''in general'' confident about their money management, although some acknowledged their financial situation was quite tight, bearing in mind many respondents were students on limited income.

''We found young people have strongly negative attitudes toward credit, particularly towards credit cards,'' Matthews said. Nearly 80 per cent said credit cards were ''problematic'' and only 38 per cent owned one.

''This suggests that messages such as that from the Commission for Financial Literacy and Retirement Income are coming through. Young people do recognise the importance of saving, although it would appear that hasn't become a regular habit at this stage for them.''

More than 90 per cent of the respondents said they recognised the importance of saving, and four out of five agreed it was better to use savings than credit to make purchases.

Westpac managing director of private wealth and insurance Simon Power said the results showed young New Zealanders needed more education about budgeting and saving.

''We are making some headway, but clearly not enough and not fast enough,'' Power said.

''The positive is that over the past four months we've seen an increase of six per cent in KiwiSaver signer-ups in this age group, but there's a lot to do on a number of levels.''

The survey also found that young people were keen bargain hunters, with more than 90 per cent comparing prices when they shopped.

 

Contact Jazial Crossley
Wellington business reporter
Email: jazial.crossley@dompost.co.nz
Twitter: @msbananapeel

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- The Dominion Post

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