IN TOUCH : Breaking financial taboos

New Zealand sets standards globally in terms of financial education and last month’s launch of the draft national strategy to introduce personal financial management into the school curriculum confirms this. That’s according to international financial literacy expert Dara Duguay, who was in Wellington for the launch.
“New Zealand has been world leader in many ways when it comes to financial education. On the financial information front, the Sorted website is something many other countries are trying to emulate. New Zealand is also one of very few countries to have carried out national survey on the financial knowledge of the adult population,” says Duguay, who heads Citigroup’s office of financial education in the United States.
With Kiwisaver meaning more people are having to make choices about how to manage their money, the more information and education available, the better, she says.
The education strategy, led by the Retirement Commission along with the public, private and voluntary sectors, aims to set the direction for improving the financial literacy levels of New Zealanders.
“Improving our knowledge and competence with money is one of the biggest issues for New Zealanders. This strategy indicates range of tactics to lift our nation’s financial literacy – from the recent inclusion of financial education into the school curriculum, getting rid of financial jargon, and encouraging financial education in the workplace,” says Retirement Commissioner Diana Crossan.
“To lift New Zealanders’ personal wealth and ensure every Kiwi enjoys good standard of living, it’s vital each individual has the skills and knowledge to make informed financial decisions,” she says.
Duguay backs this strongly, saying the strategy is “huge step forward” in lifting the country’s living standards. She says too often financial matters are considered taboo and impolite to talk about, which means children grow up with little knowledge and experience of how to plan and manage money.
“Often parents don’t understand money management themselves especially as these days it is far more sophisticated in terms of the options and tools available,” Duguay says. She adds that declining national levels of savings highlight the widespread lack of money nous and have potentially devastating implications for living standards.
“The earlier you can teach [people] about money management, the more you do to avoid them getting into money difficulties later in life,” Duguay says. She cites American research which shows those with personal finance education make, on average, an extra year’s salary over their working life.
Duguay hails from Washington DC and has been involved with financial literacy in the United States for more than decade. She founded the Jumpstart Coalition for Personal Financial Literacy (www.jumpstart.org), group bringing together hundreds of financial service groups and organisations to collaborate on financial education initiatives. She has also written several personal finance books and regularly appears on national television and radio in the United States as an expert on personal finance.
Feedback and recommendations on the draft national strategy can be made via www.retirement.org.nz. The final version will be released by March 2008.