New Zealanders have little problem grasping key financial concepts but many people are failing to actually put their knowledge into action, according to a survey.
The Financial Knowledge and Behaviour Survey found Kiwis ranked highly for their level of financial literacy compared to other OECD countries but were less impressive when it came to actually putting it into practice.
While 85 per cent of Kiwis understood what a budget was and 73 per cent believed having a budget was beneficial, only 61 per cent actually had one in place.
Similarly, 91 per cent believed it was important to have a will but only 59 per cent had drawn one up.
The survey - which was undertaken by the Commission for Financial Literacy and Retirement Income with ANZ Bank - involved 852 face-to-face interviews carried out earlier this year.
David Kneebone, the commission's executive director, said the results showed there was a gap between what Kiwis knew and how they behaved.
"The challenge for everyone involved in financial education is how we turn knowledge into action."
This year's survey was conducted by Colmar Brunton and follows on from surveys in 2009 and 2005.
It showed that 78 per cent of people had financial goals but only 34 per cent had a plan in place to achieve a one to five year goal. Even fewer, 25 per cent, had a plan in place to achieve a five-plus year goal.
On a more positive note, 84 per cent answered correctly when asked if they knew the meaning of 'net worth'. That was an improvement of five percentage points from the 2005 survey.
When the results were compared to the financial knowledge levels in 14 OECD countries - including Germany, United Kingdom, Malaysia, Norway and South Africa - New Zealand came out on top.
Kneebone said the international comparison was good news but there was room for improvement.
"While we may be doing well in comparison to other nations, the survey highlights the areas that need special attention. For example, only 49 per cent of us understand compound interest."
John Body, managing director of ANZ Wealth, said KiwiSaver and ongoing public debate about retirement savings had resulted in higher levels of financial literacy.
"People are far more aware of these issues than a few years ago and this is one of the reasons New Zealand scores higher than other OECD countries."
Kiwis no longer had a "she'll be right" attitude toward savings, he said.
Other findings in the survey were that two in every three Zealanders could access emergency money if something unexpected were to happen, and that use of internet banking had increased substantially.
The national survey was carried out between February 9 and March 31 and the average interview length was 61 minutes.