Nearly half of Kiwis worry about money, young feeling ‘overwhelmed’

Negative emotions are especially affecting the young when it comes to money and their financial outlook, a new report has found. Photo / 123rf

Almost half of New Zealanders say they often or always worry about money amid ongoing cost-of-living pressures, according to new research.

But it’s the financial outlook of the younger generation that paints a worrisome picture.

Fidelity Life’s Advice for good: Rethinking New Zealand’s relationship with financial advice report found the emotions Kiwis felt about their financial situation show two very different New Zealands.

According to its survey of more than 1100 Kiwis aged 18-69, 47 per cent reported “often” or “always” worrying about money.

But that figure rises to 53 per cent for those under 35, who say they “often” or “always” worry about money.

“Negative emotions are especially impacting the young,” the report says.

“In this age group, their perceived level of wealth is affecting mental health, with ‘overwhelmed’ being the most-selected emotion.”

Thirty-seven per cent of those aged 18-24 said they feel “overwhelmed” about their financial situation, while 59 per cent of the same age group reported feeling negatively overall towards their finances.

In contrast, 81 per cent of those in the 65-plus age group felt positive about their financial situation.

Overall, only a third (34 per cent) of respondents reported feeling comfortable.

Too much trust in family?

But it’s not just the cost of living affecting Kiwis’ financial and emotional wellbeing.

Fidelity Life chief executive Campbell Mitchell said an over-reliance on amateur advice, such as from family, was contributing to what he called a high “financial fear”.

The research found while 88 per cent of New Zealanders agree financial advisers are the most trustworthy source of information on finances, only 22 per cent have consulted one — against 36 per cent who have sought help from family.

“Our parents have experienced different conditions,” Mitchell said.

“Baby boomers who have achieved financial success via the traditional route of buying a home and an investment property may consider themselves financially savvy without taking into account the fact they’ve lived through one of the greatest property booms in our history, and that as the world changes, a different approach might work better today.”

Short-term view, long-term pain

The cost-of-living crisis is affecting many New Zealanders’ lifestyles and aspirations, with a greater focus on the short-term horizon, the report found.

This could put having a comfortable retirement at risk, however.

Eighty-nine per cent of respondents said they are prioritising day-to-day spending, followed by saving (65 per cent) and paying off debt (57 per cent).

Actively growing our wealth sat in fifth place, with only about 4 in 10 New Zealanders rating it a high priority.

“This short-term focus is leading to a linear, disjointed financial journey, centred on specific milestones rather than enabling the long-term outcome of living comfortably,” the report says.

“Notably, we’re not thinking far enough into the future to set ourselves up for a comfortable retirement, with only 3 per cent of those under 35 mentioning this as an aspiration, and only 23 per cent in the 55-plus age group.”

The good news, the report says, is that most New Zealanders (79 per cent) have KiwiSaver, while 30 per cent have stocks and shares or managed funds.

“This provides a helpful way into conversations about the value of working towards financial goals early, compounding interest and how different behaviours and settings can influence our long-term ability to achieve our goals — not just for retirement,” the report says.

Lacking in money confidence

The report also highlighted a shortage of money confidence in younger Kiwis right up to those nearing retirement, particularly ethnic minorities.

“We lack confidence when it comes to making decisions about our finances until we’re nearing retirement,” the report says. “Even in the 45-54 age bracket, around half of New Zealanders still feel ‘uncertain’ or ‘unconfident’ making money decisions.”

Ethnic minorities need even greater support to build confidence, the report found, with three-quarters (74 per cent) of Pacific Islanders feeling unconfident or unsure making financial decisions, as do 59 per cent of Asians and 56 per cent of Māori.

“The evidence shows most New Zealanders aren’t seeking financial help, either through regular financial health checks or at key life stages, until they’re nearing retirement — when it may be too late,” said Fidelity Life’s Mitchell.

Cameron Smith is an Auckland-based journalist with the Herald business team. He joined the Herald in 2015 and has covered business and sports.