KEY POINTS:
Q. Why is financial knowledge important?
A. It's important to understand what's happening with your money to make good financial decisions for yourself and your family. Banking systems are sophisticated, much happens over the internet, and borrowing is part of life.
Q. Is the need for
better financial knowledge more important in today's world? Why?
A. Yes, most certainly. We're seeing an ever-widening range of organisations subject to different regulations offering financial services and products. New Zealanders need to know what choices are available and understand the implications of their decisions. The financial decisions people make today will affect how comfortable they are in their retirement.
Q. So how do New Zealanders rate on financial knowledge?
A. Overall, not too bad, but there are some pockets of people who don't score very well - especially younger people (18-24), older people (75+) and those on lower incomes. They are also confused about financial terms - for example, 25 per cent of people don't understand what "equity" means.
Q. It looks like KiwiSaver has kick-started the nation's savings habit.
A. Yes, and that's a great step forward. We're living longer, so we'll need more money to support us. New Zealanders are under pressure to save much more than their parents or grandparents. It's much easier if you've got into the habit of putting a bit aside from an early age.
Q. Shouldn't it be taught in schools?
A. Yes, and we understand the Retirement Commission and Ministry of Education are working on incorporating financial education into schools from 2009.
Q. But isn't this something that parents should be teaching their children?
A. Saving, budgeting and debt management have to be learned and practised. Many in the low-knowledge group may not be aware of the skills and knowledge they need. It's very difficult for children to learn good savings and budgeting habits when they don't see it in action at home. This is a great opportunity to break that cycle.
Q. Should the involvement of companies such as banks make us wary of such programmes? Don't they have a conflict of interest?
A. Quite the opposite. As a bank, ANZ is in an ideal position to provide a financial learning programme such as MoneyMinded. We've taken great care to position the programme as an opportunity to learn about how people can better manage their money. It's not about promoting ANZ.
Q. Wealthier people are more financially literate - is this the cause of their greater wealth or the effect of needing to do things with their money?
A. Financial knowledge is linked to education and income, but this is not always the case. There are some wealthy people with little financial knowledge, and it's difficult to know why. It's in everyone's interests to ensure they have the skills to make the best decisions about their finances.
* You can download a copy of the ANZ Financial Knowledge Survey Report from www.anz.co.nz
