OPINION: To many people they are scary words, so let's get them out of the way at the start. Financial literacy. There, we've said it. No need to be frightened. They're out there.
Those two words probably mean different things to different people, but what we're talking about is the ability to make informed judgments and good decisions about the use and management of money. Heavy stuff but a worthy topic.
How do you think you stack up when it comes to being in control of your finances? Do you know where your money is going? Do you have a budget that is regularly updated? Have you got something put aside for the proverbial rainy day?
A financial knowledge survey, last conducted in 2009, found almost a third of New Zealanders have what was defined as low knowledge. People in this group were more likely to be 18 to 24 years old, or over 65, be of Maori or Pacific descent, tenants rather than homeowners, have a low income, and have only primary or basic secondary school education.
A further 26 per cent of those surveyed had medium knowledge.
The survey found one in six New Zealanders has difficulty managing money. That's 16 per cent of us.
That's unacceptable. And it's why last week we supported the first national Money Week, run by the Commission for Financial Literacy and Retirement Income, which cast a magnifying glass over the subject. The week-long series of financial education events and activities was designed to raise awareness of how people can improve their money management and find assistance. It's only in its first year - and we hope it will happen annually - but it's something we wholeheartedly agree with and, given the results of the financial knowledge survey, a worthy subject to highlight. In June 2010, The Southland Times also ran a 10-part series, Making Cents, aimed at helping young people improve their financial knowledge.
Some people wear their lack of maths skills as a badge of pride. How many times have you heard - or said - "I can't do that because I'm no good at maths or numbers"? That's not a good position to be in.
You shouldn't be embarrassed about taking control of your finances. Empowerment is good because it brings a greater element of control, while even a little financial planning can go a long way towards avoiding a financial crisis.
We're all well aware of the economic issues facing the European Union and the slowdown of the American economy, and the impact that has in our own backyard. Last week's announcement of job losses at New Zealand Aluminium Smelters would have sent shivers down the backs of many Southlanders.
It's too easy to be living on an economic knife edge, but there are things you can do to rectify this. Taking control of your financial situation is easy to do, it just requires ownership. And that's something the Jubilee Budget Advisory Service can help with. The non-profit organisation offers budgeting advice and education to help empower people to look after their own finances.
But there are easy steps you can take to bring your finances under control. Countless websites - including sorted.org.nz - offer tips and helpful advice to reduce your costs.
We've also run a handy how-to garden section that offers a simple guide to setting up a vege patch to feed the family and reduce food costs.
With the wealth of information and support available, there's no need to be a victim of poor financial knowledge. It's up to you, nobody else.
- © Fairfax NZ News
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