Kiwi financial confidence boost
New Zealand citizens are better than they think at managing money, writes
Iget tired of people saying that Kiwis lack financial knowledge. Sometimes they say it in a way that is just a general whinge, but at other times it is a way of selfpromotion; a kind of look-howwell-I-have-done way to sell a seminar or coaching course.
In fact, we are a lot more financially savvy than we know - it is simply incorrect that Kiwis do not have financial knowledge and we should give ourselves a lot more credit than we do.
According to an OECD survey that came out last month, New Zealand ranked 5th equal in financial knowledge, behaviours and attitudes.
This was a major survey: 52,000 people were interviewed across 30 countries including 1300 Kiwis aged 18 to 79.
We are ranked equal with Hong Kong and ahead of many much wealthier countries such as the UK, Korea, and the Netherlands.
This survey confirms my long held belief that we are on average, a financially literate nation.
Overall we are literate and numerate and most of us have good knowledge of and attitudes towards finance.
The survey was clear that we have much better knowledge of money than we think.
When asked how good our financial knowledge was, only a third of Kiwis thought themselves above average.
However, testing showed that in fact two thirds were above the international average. In typical Kiwi fashion we ranked our own personal ability below what it really is.
This is not to say that there is nothing to be done on financial literacy and capability.
Of course there are gaps and still plenty of room for improvement.
In particular, we need to think whether we are applying the knowledge that we have to do the right things in the right ways.
It is one thing to have knowledge and skills, but it is quite another to use them.
Knowledge and skills are prerequisites for managing finances, but the right attitude and good habits are also important.
Our attitudes and mindset drive our behaviours.
Our habits are what we repeatedly do, the behaviours that we default to.
It is possible to know things about money and to possess the skills needed but to have the wrong attitude or habits.
I suspect that these two areas – attitude and habits – need more work than anything else.
Ultimately, our finances and our lives will only be as good as our behaviours.
We do need to apply what we know and act if we are to make ourselves better off.
Nevertheless, this OECD survey shows that we Kiwis are pretty good at beating ourselves up over something even when we are actually quite good at it.
By international standards, our financial knowledge and literacy are good, and perhaps we should take a moment to celebrate that.
Martin Hawes is the Chair of the Summer KiwiSaver Investment Committee.
He is an Authorised Financial Adviser and a disclosure statement is available on request and free of charge, or can be found at www.martinhawes.com.
This article is of a general nature and is not personalised financial advice.