Teaching Kids About Money Early Helps Them Avoid 'The Bear Traps'

Scoop

03-05-2025

RNZ Online
There's one question that financial journalist Frances Cook gets asked repeatedly.
'The number one thing that people say to me every single time is, I wish I knew this earlier.'
Cook, who hosts the podcast Making Cents says the government's announcement of financial literacy education for students in years 1-10 starting in 2026 then is a good step towards ensuring young people get on the right financial track while they have time on their side.
Frances Cook is a financial podcaster, journalist and reformed "money mess."
'Because the thing about money is money and time are so strongly linked," she tells RNZ Nights.
"If you don't have much money, then you can still get ahead if you've got time on your side.
'So, the earlier you can start with some of these things, the easier it is for you to get ahead.'
Before she started tackling her own financial situation in her 20s, Cook believed money planning was for others. She says this belief remains rife in New Zealand.
'We absorb all of these cultural narratives about money, and that's just not for someone like me, is a really, really tough one, because we often don't think it consciously, but it will stop us even looking for the low-hanging fruit."
Even just changing your approach to KiwiSaver will make a difference, she says.
'You don't have to put in any extra money. Change a couple of KiwiSaver settings, and you can be doing so much better in life.'
Getting in early can help people starting out in their career make smarter early decisions that will bear fruit many years later, she says.
'You're getting in on the ground level, and you're talking to kids in a classroom, you're making money less of a taboo in the first place, and that, in itself, is actually just as powerful as any of the dollars and cents learning.'
This deficit in financial knowledge entrenches inequality in New Zealand, she says.
'We don't want a landed gentry situation, where if your parents are wealthy and they understand money and they teach you about money, then you get this big head start in life.
'We already have that a little bit with the bank of mum and dad being so important for people getting into their first homes.
'If we also have that [inequality] for the mere knowledge of how money works, the mere knowledge of the bear traps to avoid, and the little things that can get you ahead, even if you don't have much money, then we're going to have very quickly, a very unequal society.'
She suggests year 1 students should be taught the very basics about just what money is and how it works.
'Just getting them comfortable with the idea of money, that things cost a certain amount. Once it runs out, it's gone.
'Having open conversations about what people around them do with money, encouraging curiosity, encouraging the ability to ask where it comes from? What it's doing? How is money earned?'
Older students can be introduced to more sophisticated financial concepts, she says.
'How can you give them as much ownership as possible and a safe space to fail? If you want to put money away for them so that they can learn how to do things like invest, love that, but don't do it for them.
'Give them ownership of it. If you're helping them get into KiwiSaver or Sharesies or whatever else, let them choose the investments. Let them make some bad ones.
'Let them see how the market works. It goes up and down, because that is an amazing time for them to experiment while they've still got the safety net underneath them.'