Saving is a simple process
MoneyMates is part of a Ministry of Social Development initiative, Building Financial Capability (BFC). The ministry says: ‘MSD has changed how it funds and supports budgeting services. A new approach was developed through codesign with the sector. The aim is to build the financial capability and resilience of people, families and whanau experiencing hardship. We are putting in place a suite of products and services, from prevention to intensive support, that will help people reduce unproductive debt, reduce stress caused by financial problems, increase short- and long-term savings, improve financial confidence and capability, improve resilience to cope with financial shocks, and improve financial and material wellbeing.’
They say there are four core parts to delivering BFC: financial mentors (focused on helping people with their finances); MoneyMates (a peer-led support group programme that encourages people to learn from others as they talk about money and finances in a group situation); the MoneyMates Fund (grants to support innovative ideas that will build the financial capability of people in hardship); and the Community Finance Initiative (affordable credit for individuals on low incomes).
Any initiative to help people take control of their money is good, but we wonder if MSD and its BFC is getting a little bit too fancy for its own good.
We think it’s pretty simple — if you save part of everything you earn then tomorrow will be better than today. How do households on a low income save money? The same way everyone else does — by not spending everything they earn. The easiest way to do that is to put something into a dedicated, and preferably untouchable, savings account, like Kiwisaver.
Saving involves setting priorities, and doing what oily raggers do — growing your own fruit and vegetables, drinking lemon water instead of expensive sugary drinks, making lunch each day instead of buying it, not wasting money on smokes and booze, giving up the Sky subscription, using the local library, seeing a trip to McDonald’s as an occasional treat rather than a regular event, buying from an op shop instead of hire purchase, and all the other things that each save a few dollars, but add up to many dollars by the end of the week.
While the MSD may have well intentioned programmes encouraging better money management, our observation is those who most need to save don’t, and won’t unless they are compelled to do so. Unfortunately not a lot is done in schools to teach young people about money — it seems the priorities nowadays are on other worthy causes like recycling and worm farms. Saving money does not make the grade as something to be encouraged, despite its huge importance.
"While the MSD may have well intentioned programmes encouraging better money management, our observation is those who most need to save don’t, and won’t unless they are compelled to do so. "