Savvy youngsters have many financial tools at their disposal
Back in the 1970s and ‘80s, you didn’t learn if your parents didn’t teach you or you weren’t tenacious.
Findings from the third stage of Massey University’s Financial Education and Research Centre show young New Zealanders are growing in their financial capability, although young men are doing better than young women.
The study found life experience has replaced parents as the primary source of financial information.
Whether you’re 13, 30, or any other age, Money Month is a great time to get started on personal financial skills, or to brush up on them. Just don’t fall for the ‘poor me’ mentality. You have to want to learn, and here are some tools.
Educational websites
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Many websites and YouTube channels offer free resources and courses on financial literacy. You don’t need to be at school to use the Sortedinschools.org.nz resources, which include a range of diverse topics from “what is cryptocurrency” to “building a tiny house”.
Another New Zealand-based resource is Banqer, which has opened up its Virtual Economy Experience to adults for Money Month. Get in fast. The offer is limited to 1000 adults.
You’ll also find numerous YouTube channels dedicated to personal finance. A good local channel is MoneyHub New Zealand. Most personal finance concepts transcend borders, and there are plenty of overseas ones as well, such as The Ramsey Show. International education resources such as Investopedia or the Khan Academy’s personal finance and financial literacy sections are very good.
Personal finance tools and apps
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For some people, jumping in there and just doing it is the way to learn. Tools ranging from money personality profilers to simple-to-use budgets and much in between can help with learning how to manage money while actually doing it. Sorted.org.nz has web-based tools that enable you to write a budget and more. There are multiple mobile apps for tracking expenses, setting budgets and saving money. New Zealand-based apps such as PocketSmith are very good. Some overseas ones such as Spendee and Fudget work here. Spendee, like PocketSmith, can download your bank transactions automatically. MyBudgetPal from Booster also does that. It is New Zealand-based and free. But at the time of writing, Booster was working on fixing tech problems.
Books
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They’re old tech, but books are still popular with young people. Bookshops are seeing a revival in this demographic. My colleague Frances Cook’s books Tales From A Financial Mess and the more recent Your Money, Your Future are good places to start. Frances made mistakes young and had to teach herself about money. She understands what digging yourself out of a financial hole looks like. The Barefoot Investor by Australian Scott Pape has a huge following among younger people. Another international book focused very much on coming of age in personal finance is Why Didn’t They Teach Me This in School? by Cary Siegel. It teaches eight important money lessons. The other book I should mention is The Sharesies Guide to Investing by Brooke and Leighton Roberts and Sonya Williams. The only reason I hesitate is that it’s important to learn to “walk”, i.e. grasp basic financial tasks, before “running”, which I define as investing beyond KiwiSaver.
Financial simulations and games
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Gamification is a great way to learn. Both Sortedinschools.org.nz and Banqer offer personal finance games. If you are interested in learning about investing, then trading games, simulators and demo accounts are helpful. They allow you to lose virtual money rather than the real stuff. Investopedia and MarketWatch offer virtual portfolios that follow the actual markets, so you can watch what would have happened if you had been investing your own money instead of virtual funds. If you must dive in, then you can tinker on sites such as Sharesies with a few dollars at a time. But please don’t assume you’re going to be better at this than the experts. Sooner or later, markets fall and new investors get burned.
Finally, young people learn by making mistakes. The tools above can help, but sometimes getting it wrong is the only thing that gets through. I know it’s hard, but try not to save them when they do something dumb like spending their rent on UberEats. Or if they’ve crashed the car, make sure they pay off every last cent of that $1000 insurance excess. No matter how long it takes them. Hopefully, they won’t do that again.
Poll: Are our Kiwi summer holidays helping us recharge, or holding the economy back? ☀️🥝
There’s growing debate about whether New Zealand’s extended Christmas break (and the slowdown that comes with it) affects productivity.
Tracy Watkins has weighed in ... now it’s your turn. What’s your take? 🤔
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72.7% We work hard, we deserve a break!
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15.9% Hmm, maybe?
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11.4% Yes!
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7 tips to help save money this Christmas
1. Regift the things you’ve never used
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We all get given things we’ve never wanted, can’t use, and don’t need.
Instead of putting them in the bin, see if you can find a new home for them.
Right now, I have a jar of home-made pickles I know I won’t eat and a book about rugby I won’t read. But I also know my dad will love them.
Likewise, my daughter got a coffee mug for her birthday. She’s 12 and hates coffee – but it’s the perfect gift for her uncle.
This suggestion gives new life to items that might otherwise end up in landfill – and it saves you money too.
But don’t perpetuate the junk. You’ll need to think carefully about whether that item really suits the person you’re regifting it to.
2. Organise a secret Santa
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An office and school favourite, this is an easy way to make sure everyone gets a gift, but no one blows their budget.
Our family set the limits at $20. We use one of the free online tools to help randomise the selections. (a good one is drawnames.co.nz).
For Consumer NZ’s Christmas party, even stricter rules are in place: the limit is $0, and the item has to be second-hand or home-made.
3. Get crafty and make stuff
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This is time consuming, isn’t everyone’s cup of tea, and you’ll still need to buy the raw materials to make it work.
But, a commercial Christmas card with a lame joke on the front can cost around $7.99. That’s when you realise it can be much cheaper and more satisfying to make your own. All you need is a piece of card and some coloured markers.
Other things you might be able to consider making include:
Christmas crackers
candles
soap
chocolates.
Baking, jams or preserves can also be nifty ways to make cheap, personalised gifts.
Plus, they can be far more tasty for the receiver than another pair of socks.
4. Buy second-hand
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Everyone loves a bargain, and buying second-hand has become far more accepted in our age of fast fashion and over consumption.
Facebook Marketplace and Trade Me remain great sources of second-hand goods, especially if you’re after books, records, toys or clothing.
Remember, scammers can operate on those sites, so learn about staying safe online from our article How our scam expert stays safe using online marketplaces.
5. Save on the Christmas dinner
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Perhaps the most stressful part of Christmas is putting together dinner for the entire family.
Planning and shopping in advance can help you take advantage of specials. And you won’t need to rely on getting everything in the final week, when prices could be higher.
Grocery comparison apps like Grosave, Grocer or Price Pulse can help you compare prices across different supermarkets.
Meal-kit services like My Food Bag and Hello Fresh say they will help you take the pain out of Christmas dinner. However, it’s almost certainly cheaper to source your own ingredients and cook the food yourself. Discover what we found when we tracked the supermarket prices of Christmas treats.
And here are our tips on how to prepare a stress-free Christmas dinner.
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6. Start saving for next Christmas
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If your bank balance is a little lean heading into Christmas, think about opening a savings account for next Christmas. Setting up a small weekly automatic payment into the account can help take the pressure off next year.
Or you could consider joining a supermarket Christmas club. It’s basically the same thing but can offer decent rewards and bonuses closer to Christmas.
7. Be cautious about taking on debt
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Given the current cost-of-living pressures, you may feel you have to go into debt to get through.
However, there are steps you can take so Christmas debt doesn’t blight your New Year.
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