A new ANZ campaign is seeking to encourage the financial shrinking violets among us to open up a bit when it comes to talking about our personal finances.
More than half the people surveyed by ANZ said they would rather talk about politics or mental health than their finances, or said they had lied about money because it's easier than talking about it.
"One in three say they rarely or never talk to other people, including friends or family, about their finances," says ANZ.
The data was collected as part of the 2021 ANZ financial wellbeing survey, which was completed online by 1,505 randomly selected adults (over the age of 18), over two weeks in June last year.
The resulting campaign, called 'LET’S TALK ABOUT FINANCES,' [finances] offers tools for giving financial wellbeing a place in everyday conversations, particularly in casual settings where people are likely to feel relaxed and comfortable, like a family pizza night or coffee with a friend.
The slicing of the pizza itself could offer a segue into a conversation about proportionate spending, using the 50-30-20 budget rule: allocating 50% of your money to your needs, 30% to wants and 20% to savings.
The suggestions also include sharing a savings goal with a friend, talking through saving strategies together, and having them check in with you as a way of building accountability.
ANZ says the topic of finances can evoke boredom, guilt or even fear but; "the more we discuss finances in a relaxed environment - say savings goals at a mate’s BBQ - the more we normalise it."
For some, avoiding these conversations may be particularly isolating at a time when financial struggles are more collective than ever and more open communication could hold valuable advice or reassurance.
In a climate of rising interest rates and inflation, most people have feelings about being squeezed at the petrol pump, the supermarket, and even when paying rent and keeping the lights on.
The Russian invasion of Ukraine is also making people more aware of ethical investment, another conversation which would benefit from wider discussion in everyday conversations, says Barry Coates, CEO of Mindful Money, a KiwiSaver research charity promoting ethical investment.
Coates says people often hold back from financial topics through a sense of disempowerment, a feeling they "have to be an expert in order to understand what’s going on with their savings and investment."
"Rather than [always relying on a] financial advisor there’s some common sense things they can do themselves, but they are often not given the information and the confidence."
KiwiSaver is a confusing area for many kiwis, with a surprising number lacking a fundamental understanding of its structure, he says, particularly the way investments are spread across different companies and entities and this can make some less likely to dive into a discussion about it.
Stories of 'effortless' financial success downplaying the levels of know-how, planning and risk also dent the confidence of those who feel disempowered, leaving them wondering why they haven't made the formula work and less likely to discuss it.
"People tend to feel embarrassed and are often made to feel like failures in the context of articles about how people get fabulously rich by 'working hard'. Anyone reading them thinks 'but I work hard," says Coates.
The ANZ survey also argues tools to make kiwis feel like they brought something to the table in financial discussions were vital. One in three believed they would open up more if they were more financial savvy or had more tools to get the conversation going.
“In recent years New Zealanders have got better at discussing issues that they used to find difficult like mental health and wellbeing. But when it comes to talking about our finances we still struggle," says Ben Kelleher, managing director for personal banking at ANZ.
The top area kiwis wanted to gain more confidence in is 'how to save or invest more for the future.' This was particularly true of younger people with 69% of those under 30 aspiring to this goal.
Survey findings indicate when it comes to saving and investing, 77% felt they could be doing better with their money and 60% wanted to save more or invest for their future.
The second highest priority area is 'reducing debt or a mortgage' and this was particularly important with those aged 30-49, who were typically in the thick of mortgage life.
The survey indicates there is room for improvement in lower age groups before they get to this level of financial responsibility, with 41% of 18-29 year-olds feeling embarrassed talking about finances, and ANZ proposing more exposure to the topic in early years as a possible solution.
“It is really important that everyone grows up with an understanding of money and the fundamentals of budgeting, saving and investing,” says Fiona Mackenzie, managing director for funds management at ANZ.
22 Comments
"One in three say they rarely or never talk to other people, including friends or family, about their finances,"
I would think that house prices have been one of the hot topics at the BBQ or around the water cooler. In NZ, that is the proxy for "finances." I took a brief look at the model used in this research. Seems to be woefully out of context for the millennial demog who are probably more interested in opportunities offered by crypto, NFTs, and decentralized finance. Much of the feel about the research is still based in traditional finance.
If the stats coming out of the banks the last few years, where a significant proportion of society are living paycheck to paycheck, and we have record numbers of families needing food bank assistance to feed their kids...you can understand why financial planning/finances aren't up for discussion.
A lot of people have very little hope for a future that has any prosperity in it........the housing inflation of the past decade has been terrible for young people....and now the consumer price inflation is going to make it even worse.
The only hope they have is that the consumer price inflation is the trigger that collapses the housing market back to more affordable levels.
The problem is that in good suburbs buying property is competitive. Always will be so it's between whoever is wanting to buy it at that time. There is a bit of randomness in this. But essentially it's: who can afford the most up to a point where it becomes stupid compared to the other options out there..
I wonder if this is a generational thing? My (boomer) parents are not very open about their finances at all - they never discussed salaries or savings or anything like that except in the most general terms with me (e.g., I have no idea what they earned when they were working, I know that now they are retired they are mortgage free and have sufficient retirement savings not to be worried at all). Whereas I'm a millennial, and with my six closest friends I know exactly what they paid for their houses, how much deposit they had, what (if anything) their parents contributed and whether it was a loan or a gift, roughly if not exactly what their salaries are, roughly how much they save on regular basis, if it's in the bank or in shares, etc. We talk about this stuff with each other.
I'm a aging boomer who had, and perhaps still have, in some degree, a compulsion to save rather than spend from my childhood. My parents admired my resolution. I even built my own money-safe out of wood and covered it with scrap tin sourced from my uncle's next-door plumber's scrap pile. It had a slot in the top for inserting pennies, threepences, sixpences, shillings, florins, and half-crown coins. When I deemed the little safe was full, I accessed the contents by unscrewing the bottom of the safe and banking the coin in my Auckland Savings Bank account. I looked forward to receiving even the pittance of interest my savings attracted.
My maternal grandmother then decided to encourage my savings by donating five pounds whenever I had saved a further one hundred pounds. At highschool I had a late afternoon paper-run ("The Auckland Star") six afternoons a week. On Saturdays, I not only collected the monthly payments from my customers but also from the customers of other boys who had paper rounds in different areas. I was paid a commission based on the amount collected. When I was 15-years-old I was diagnosed with OCD partly because of my obsession with money and my compulsion to count to seven each time I was compelled to turn my head to the rear (thus taking my eyes off the road) while cycling home after finishing my paper-run. During one of these bouts of my compulsion I ran my bicycle into a parked car but fortunately fell onto the grass berm. This accident caused my parents to take me to a psychiatrist to look into my obsessional behaviour. I managed to stop my obsession to take my eyes off the road when cycling but continued my obsession with saving money. As a teenager during my last years at highschool I developed a reputation as a skinflint but I was a popular boy and despite my reputation I still retained all my friends. When I was nineteen-years-old in 1967 I purchased my first house for $11,000 ( decimal currency had just arrived) with a $3,000 deposit from my savings and a mortgage from a solicitors trust account.
My friends were stunned when they heard about my house purchase. They wanted to know how I could possibly acquire a house at my age. I just told them I had saved up. But I never said you have to acquire OCD to save that well.
They could have saved hard and bought the whole house you know? Avoided all that doom and gloom of 23% for their 3rd and 4th mortgages etc.
Imagine if the young of today had access 15%+ term deposit rates to help them save 3 - 4 x their annual salary for a house deposit.
Well that's exactly what Boomers had access to, except swap out house deposit for house.
I think financial acuity will go backwards from here due to how poorly school children are performing now in maths. Plus how little they read books as well.
Personally I take advice from nobody. (Well just my own nous plus my wifes'). So far so good. Incl some stock picks ~20 yrs ago. (Sold since. I hold no stocks directly any more except a small amount indirectly in kiwisaver).
I still had a little faith in education until I took some Year 10-11s (14-16 years old) on a hiking trip last week.
Girl 1: "How far to go?"
Girl 2: "4km."
Girl 1: "Oh. How many metres in a kilometre?"
More depressingly, I heard the same question asked by yet another girl a few hours later.
Problem is if you educate the kids, let them play outside, don't give them access to electronic devices, don't feed them junk food etc then how can one genuinely partake in the sharing of insecure Boomer memes designed to put younger generations down?
You know the ones, they go on about how they used to drink from the garden hose, didn't have plastic milk bottles and rode their bikes until the street lights came on etc. What's usually missing from the story is how they became adults and shaped society into what it currently is.
Some kids are interested, some aren't. I had to teach one to save and one to spend! All you can do is have open discussions about everything and hope some of your values rub off.
However some of them want everything and they want it now. Sure it's impossible to get a house without help today. It was easier in the old days but we still spent the first 15 years buying second-hand appliances and furniture! Some of our parents spent the first 15 years using apple crates for a table and chairs. So things change and you gotta roll with the punches.
Having a forum like this is a good way for anyone to upskill and I often suggest it as a resource. Most often, deaf ears though.
Thanks to everyone especially to printer8 yesterday regarding advice to recent FHB. One of my sons and partner has just bought in the Wellington market as they didn't want to spend another year locked into a rental contract. Prices may reduce but credit may be impossible to get.
They signed for 3 years mortgage. In that time they would have paid $101,400 in rent which, if deducted from the mortgage payments of $129,480, leaves approximately $28,000 paid above what they would have paid in rent for a crappy CC apartment. And they have a modern roomy 3 bed house with a view and a garden that is a train and bus ride to the city. They move in this weekend and I am going to send printer8 comments to enhance their joy.
I hope your son and his partner are happy, but you forgot to take into account a number of costs they face over and above mortgage. For a start, rates and insurance - probably at least 5k a year. Then maintenance - they may not face any immediate costs, but it would be wise to start putting money away. $50 a week probably bare minimum - so another $2600 a year. Then the cost of commuting if they work in the city - potentially another $50 a week or so each. So that's an extra $10k a year realistically that you haven't accounted for. Not taking a pop at your son - presumably they've decided it's worth it - but it's a mistake not to present all the potential costs entailed by home ownership when making these types of comparisons.
Discussing aspects of personal finance has become so uncomfortable because people in the mid-life age bracket can find themselves in such completely different financial positions, mostly based around having bought a house or not.
At 40 but without owning property - you're more or less screwed. 30 and have owned for a number of years already - you are well set for the future. Single vs in a secure relationship? Still got a student loan? It is such a risk to try and talk finance and investment, to discuss kiwisaver or the like. I don't want to start sounding like someone's Dad regarding saving money. It's not nice to discover a group of friends where one is looking ad investment properties and the other has just realized they will never be able to afford a deposit on an actual home. Much easier to stick to what we definitely have in common.
The tips from the ANZ page above might have some use with certain people where I know their situation well enough, I suppose.
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