Each week the NZ Herald's Cooking the Books podcast tackles a different money problem. Today, it's how Covid-19 has shaped money management for a new generation. Hosted by Frances Cook.

Here's the thing. Many people were already struggling financially before all of … everything ... hit us.

In the 12 months to February, research from Kiwi Wealth showed young people, Maori and Pasifika, and those who were renting, had low levels of wealth and money confidence.


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One of the big problems was the high cost of living, another was increased levels of debt.

My personal suspicion is that those two factors are related, in a reinforcing negative cycle.

So when Covid-19 came along, what happened next?

Kiwi Wealth surveyed New Zealanders in June to find out how we're all coping, and what they found was quite different from what I expected.

Plenty are doing it tough, but the people who are most worried about their personal finances are actually those who are already wealthy, earning over $130,000 a year, or with investments.

Young people and renters aren't, as an average result, feeling much worse off. In fact, many are taking this time to increase their financial activity.

Online share trading is proving particularly popular with young people, as some try to take advantage of the market dipping.

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In fact 84 per cent of New Zealanders now have savings or investments, increasing from 80 per cent before Covid-19 hit.


On the latest Cooking the Books podcast, Kiwi Wealth general manager retail and product Melissa Vasta said the survey showed the importance of acknowledging the difficult reality many face right now, even while trying to give them the tools to deal with it.

"It is really difficult, that's one thing the data shows, so we can't pretend that it's not.

"People who don't have the cushion of a home, or savings, or some sort of other investment, can get to the point of wondering if it's even possible."

Vasta said the success of KiwiSaver showed how much could still be achieved if you saved a little bit, often. Young people now trying out the sharemarket were giving themselves a chance to replicate that success on their own terms.

"People have really taken to getting started, to learning about investing, learning about shares, and starting to dip their foot in," she said.

"People really did change their behaivour. I think the uncertainty really did kick people into action.


"People were at home, you don't really know what's happening, but you feel like you should probably be doing something."

It's not hard to see, then, why so many young people were drawn to shares.

Housing may be a favourite for New Zealanders, but the barrier to entry is huge. Not many young renters have a spare $100,000 lying around for their deposit.

Meanwhile, you can start investing with just $5 a week. When you've just had a shock to the financial system, that's something within reach to start improving your position.

The trick is that you have to establish ground rules for your new investing strategy. Otherwise you could just be throwing away another $5 each week.

Vasta said starting with small amounts of money was a good technique, so that you could get a feel for what you were doing.


She said mentally preparing for the market to continue to go up and down was also important, so that you didn't make panic decisions in the midst of a dip.

"Over lockdown we had 10,000 people going through the getting started investing course, with Hatch.

"That's not even investing, just people who are keen to learn. Trading volumes and everything were up as well, but people going through that course and really wanting to learn what's best.

"That's really, that's just awesome."

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