Money wise

Element - - Finance - Adam Gif­ford Per­sonal fi­nance

The Re­tire­ment Com­mis­sion is chang­ing its name at the end of the month to the Com­mis­sion for Fi­nan­cial Lit­er­acy and Re­tire­ment In­come.

“The name never worked. Peo­ple think we are about help­ing old peo­ple, so we need to be much more clear about what we do,” says re­tire­ment com­mis­sioner Diane Crosson.

By the time some­one re­tires it’s prob­a­bly too late for much of the work the com­mis­sion does. Its aim is to en­sure as peo­ple move out of the work­force, they have built up suf­fi­cient as­sets, sav­ings and en­ti­tle­ments.

Crosson says start with sorted.org, “the best free in­de­pen­dent fi­nan­cial lit­er­acy web­site in the world.

“It is sys­tem­atic. It takes you through set­ting goals for sav­ings, bud­get­ing, man­ag­ing debt, re­tire­ment sav­ings.”

About a third of the New Zealand pop­u­la­tion use the site, and there are free Sorted book­lets avail­able for those who can’t or won’t go on­line.

Crosson is also push­ing for more to be taught in schools so young peo­ple don’t get into debt and spend­ing traps.

At this year’s na­tional Fi­nan­cial Lit­er­acy Sum­mit she asked the gov­ern­ment to re­con­sider its fund­ing cuts in the area. “We be­lieve teach­ing kids about money now will re­sult in higher sav­ings and lower debt lev­els in the fu­ture,” she said.

Young peo­ple are a tar­get in the com­mis­sion’s cur­rent “dumb debt” cam­paign, warn­ing them about the high costs of credit cards, hire pur­chase and buy­ing cars with fi­nance.

The Min­istry of Ed­u­ca­tion sup­plies cur­ricu­lum advice on fi­nan­cial lit­er­acy mod­ules for years one to 10, and the com­mis­sion work­ing with the Young En­ter­prise Trust and the Open Polytech­nic has de­vel­oped teach­ing re­sources for years 11 to 13.

There’s more advice on the web­site of the New Zealand Net­work for Fi­nan­cial Lit­er­acy, an­other com­mis­sion ini­tia­tive funded by the In­vest­ment Sav­ings and Insurance As­so­ci­a­tion, the New Zealand Bankers’ As­so­ci­a­tion and work­place Sav­ings NZ.

The banks are also get­ting in on the act. The BNZ is work­ing with Plun­ket on advice for young fam­i­lies, ASB has a schools’ pro­gramme, and ANZ part­ners with the com­mis­sion to sur­vey New Zealan­ders’ fi­nan­cial knowl­edge ev­ery four years. Sean Car­roll, the chair of the Na­tional Strat­egy Ad­vi­sory Group on Fi­nan­cial Lit­er­acy, says the world­wide eco­nomic down­turn and fi­nance com­pany col­lapses in New Zealand have cre­ated a “teach­able mo­ment” where peo­ple are re­cep­tive to learn­ing how to man­age their money well. www.sorted.org www.fi­nan­cial­lit­er­acy.org.nz

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