‘Trial and error’ no answer in money crisis
Thousands of Kiwi school students learn critical financial skills in class with a virtual economy.
As Covid-19 creates a financial crisis for many Kiwi families, calls have come for more education to be given to school students on how to handle money.
The plea has been made by Kendall Flutey, CEO of a Kiwibank-backed online platform called Banqer which, through a virtual economy for use in classrooms, aims to inspire school-age students to develop knowledge and confidence with money.
She says many young Kiwis learn financial skills either from family and friends or by trial and error — neither of which is necessarily a good thing.
“Teaching children real-world financial literacy has never been more important or relevant,” she says. “It has always been important, but since Covid many families are facing a financial crisis the like of which they have never experienced before.”
The Banqer platform is being used in over 2000 schools through a partnership with Kiwibank who provide it free to primary and intermediate schools and at discounted rates to secondary schools.
Kiwibank’s chief economist Jarrod Kerr says the bank is supporting the platform because it wants future generations to be prepared for their financial future. “Unfortunately through Covid we did see a number of people struggling; we want our customers to be confident and well-educated financially.
“By the time we deal with people as adults they are entrenched in their ways; by comparison it is a lot easier to teach financial literacy to a student or young person.”
Their comments follow a 2018 Commission for Financial Capability (CFFC) survey of 1000 young people who had just left or were about to leave school and which found that 35 per cent learned “almost nothing” about money at school.
A NZ Herald report at the time said the survey showed another 38 per cent learned “some” things about money while just 27 per cent said they had learned “a lot” about it.
Although the CFFC last year launched the Sorted in Schools financial capability programme for secondary school students (years 9-10) for the New Zealand Curriculum, Flutey says financial education in schools is patchy.
“While young people may not be making critical money decisions right now, many money habits are learned at a young age, so teaching students financial literacy today will empower them to make the right decisions in the future,” Flutey says. “They are great at these ages, they are gaining in confidence and starting to come into their own.”
She says Banqer’s mission is to empower a whole generation of young Kiwis: “We would ultimately like to see the platform in all schools, the more the better.”
The platform involves students dealing with virtual scenarios across many facets of finance including savings, interest, goal setting, applying for and working in a job, buying a house or taking on a rental, Kiwisaver, assets protection, credit cards and investing in fictional stocks through the Banqer High Stock Exchange (BHX).
“The idea is not just to give them knowledge, but to enhance their behaviour with money,” she says. “Every young person should have the right to a financial education.”
Since being launched in 2016 around 150,000 New Zealand students have taken part in Banqer programmes. The platform is used in the classroom by teachers who are themselves given instruction by Banqer through online webinars: “We want to make it as easy for teachers as possible.”
A former accountant and software developer, Flutey says she co-founded Banqer because she has always been fascinated with financial education. “I was one of those rare kids who read Rich Dad, Poor Dad (a best-selling book on personal financial education written by Robert Kiyosaki).”
Meanwhile Kerr says financial literacy is a big focus for Kiwibank. He says while the Banqer platform is a lot of fun for students, it also has a serious end-goal.
“It’s a skill every bit as important as reading and writing or learning how to swim. It is right up there and may be even more critical given Covid and its impact on the economy.”
He says it is surprising how unsure some people are about finances. “There are people who get lending and don’t know they have to pay it back; they think the bank is giving them money. There are also those who don’t know what a bank can do for them.
“We are supporting customers to be better financially empowered and by starting at a young age hopefully good financial management becomes like second nature to them.”
“It’s a skill every bit as important as reading and writing or learning how to swim.