Financial Education in schools is important and needs to be a dedicated subject
Mangere Budgeting Services Trust welcomes Labour’s plan to introduce mandatory financial literacy courses for students across all year levels from 2025.
Financial literacy is a core life skill, and it is encouraging that this will be taught in New Zealand.
Young New Zealanders need to understand financial concepts, explore risks, and develop the skills and confidence to apply this knowledge to financial decision-making. These skills are vital skills for them to be able to manage their finances.
It is evident to us that young adults have an inability to choose the right financial products and rarely understand or do any financial planning or budgeting.
Schools are an ideal channel for financial education as they provide access to all learners, and it will be helpful if every student completes a basic financial education Class in year 11.
The Prime Minister says that financial literacy won’t be an extra demand on teachers and financial education will start in primary school and be taught mainly through maths and social sciences in secondary school. It looks like Financial Education will be taught as part of existing subjects; Mangere Budgeting Services Trust believes that Financial Education should be a subject in its own right.
Schools have subjects such as languages, drama, technology, and music, so we cannot see why Financial Capability cannot be a class on its own.
Financial education is often looked at as an extra-curricular subject or as something that children will learn as they grow up. However, this is not always the case. We see numerous adults who have problems understanding finances and cannot understand bank statements or hire purchase agreements.
Many are struggling to manage their money or are in financial difficulties because they do not understand how to make sound financial decisions. Lack of financial education, especially understanding debt and borrowing puts people and families in huge financial hardship and creates poverty.
Raising the cost of food, petrol, rent and inflation, makes everyday life hard for lots of people. We see a significant number of whanau who now need to prioritise what debt gets paid first, it is disheartening to us.
Last Financial Year Mangere Budgeting Services Trust saw an increase in levels of debt. Debt with Finance companies increased by 51% and Buy Now Pay Later (includes after-pay and Oxipay) climbed up by 15%.
We see more people withdrawing their KiwiSaver funds for financial hardship reasons as their level of debt is beyond manageable. This is not a piece of good news as these people will need their KiwiSaver funds when they retire. High levels of debt also cause high stress and anxiety so people must know how to manage their finances and level of debt better. Financial literacy at schools, provided it is delivered as a subject in its own right, will help future generations.
We also saw more people last financial year, who access Mangere Budgeting Servicers Trust support because their mortgage repayments are now doubled. They are now unable to cover their mortgage repayments and pay for basic necessities. Some families are working 12 hours or more each day, so they can earn an extra income to pay the mortgage payments and not lose their homes. Once again, we believe that Financial Education at school will help the new generation to make better decisions.
Mangere Budgeting Services Trust is fully in support of having financial literacy education in schools. We think that the Ministry of Education should explore a partnership model with NGOs who are currently providing Financial Capability Services. Some of them could be a good fit and equipped to deliver classes to schools.
Mangere Budgeting Services, for instance is already delivering our Financial Capability Programme “Te Ora Putea” to a few colleges. In addition, we have recently delivered a financial education class to a small primary school. Both classes were a success, and we received lots of positive feedback.
Mangere Budgeting Services Trust sees this proposal as a positive step towards successful financial wellbeing for future generations.