Jo Raphael: Teach children early on about the value of saving

Are buy now pay later options harmful or helpful? Photo / Getty Images

OPINION

I've mostly had a good relationship with money.

I've had a bank account since birth with the BSB. (The Bay of Plenty Savings Bank – which is showing my age).

I learned about saving early on, also having a Post Office Savings Bank primary school bank book.

I would take it to school every week to get it stamped with a few coins from my pocket-money to deposit.

I would watch the balance grow - I was going to be rich, I thought.

But there have been a few hiccups.

They have been around spending money that's not really mine – that is, buying things on credit.

I have had to consolidate a high-interest rate credit card.

The finance company gave me an $8000 limit, and, while I tried to pay each purchase off before I bought the next item, it slowly got out of hand, to the point that I was only ever making payments on the interest and not the principal.

That card has now been thankfully chopped up and the loan paid off.

I will never get another one.

That's how I believe most people who get themselves into sticky financial situations start off.

But it's the online "buy now, pay later" services, which are gaining in popularity, where I believe people can become stuck.

While it can be convenient to get that item you need now and pay it off over a few weeks, you need to be strict about paying it back.

There are calls for the Government to regulate such schemes, with some saying shoppers are using the services to impulse buy things they may not need with "no idea" how they will pay later.

These concerns have led the Government to launch a review.

While I now know the truth – I will never be rich unless I win Lotto, I still believe children should understand the value of saving and that financial education should start young.

Consumers need to know from an early age that buying things on credit means they're using money they don't have and it will eventually have to be paid back.

I now only have one credit card with a modest limit. If I have to use it, I make sure it's paid off quickly. It's a great feeling having the balance owing at $0.00.