Supporting financial literacy to boost wellbeing

Managing your own finances wisely is a life skill that is becoming ever more important for survival and wellbeing in the modern world, and yet many people don’t know how to make money work for them and often pay a high price for that lack of understanding.

This is not entirely surprising as schools do not usually teach crucial money skills such as budgeting, a tragic gap in the curriculum. If family finances are not routinely discussed in the home, young people can arrive at adulthood unable to tackle challenges like distinguishing good debt from bad.

Cambridge philanthropists John and Nicola Kenel see this knowledge gap as a serious issue for the wellbeing of individuals, families, communities and the nation, so they decided to do something about it.

They have made a significant founding donation to establish the new ‘Financial Literacy Fund’ with Momentum Waikato and invite the public to also support this new funding initiative aimed at tackling this concerning issue by funding financial literacy courses and tools for young people.

VISION: John and Nicola Kenel sign the Deed of Gift establishing the Financial Literacy Fund.

John says the financial responsibilities that people need to take on are becoming increasingly complex, with factors such as retirement planning and recognising risk becoming ever more critical.

“It is all about being able to distinguish between a want and a need. It is easy to get into debt but not out of it. If you budget and save, you’ll then be able to invest, and its investment that gets you ahead,” says John.

John is the director of successful medium-density housing developer Assured Property. His concern and passion for good money management comes from his own life experience. He was one of seven children, his parents both immigrants who started with nothing in New Zealand.

“They worked hard and saved, but with a lot of mouths to feed, money was an issue. We had what we needed but we didn’t have anything flash. And yet there were times when high interest rates had a real impact on our lives, bad luck on the timing of moving house meant money was a big deal for our family when I was a teenager.

“Most importantly my parents taught us and showed us what good money management looked like. A lot of people seem to miss out on that, in some families’ money is a dirty topic, while for some they simply don’t have money to start off with. It is often farmers and others running a business from home that talk about this stuff around the kitchen table, but not everyone gets that exposure.”

John hasn’t seen relevant surveys for New Zealand, but points to a US poll in 2015 where only a third of respondents correctly answered at least four out of five basic financial questions.

He recalls a Treasury recommendation from 2010 that financial literacy be added to the school curriculum. But with no sign of that happening, he and Nicola decided to get on with actively supporting financial literacy training in the community.

“Many people are making complex decision without the skills and experience needed. They’re just guessing on something that can have a negative long-term impact on their own and their family’s wellbeing, on their ability to own a house or retire comfortably.

“People can now invest in Kiwisaver, which is a good idea, especially if you can get it underway early in your twenties, but many do so with no real understanding of how such investments work,” says John.

“We saw this when the arrival of Covid initially caused a dramatic drop in Kiwisaver balances and many people then switched from growth to conservative funds, only to then take a hit when their money was in the wrong place when the rebound inevitably happened, they literally moved in the wrong direction.

“Meanwhile new online services and apps like Sharesies and Hatch are opening up stock trading to more and more people, again a good thing in itself, but many don’t realise what they’re diving into.”

“There is no reason you can’t live reasonably well, making good decisions and not worrying about money, but you need to know how.”

Meeting that need is why John and Nicola have set up the Financial Literacy Fund.

“The investment income from the new Fund will be available as funding for well-run local financial literacy programs for kids and teenagers, as well as online tools and apps that teach these skills, such as ‘SquareOne’, and we’ll be looking to make the first disbursements in a year or so,” says John.

“If you support the goals of the Fund, we invite you to add to it, via either momentumwaikato.nz/donate or by contacting Momentum directly.

“As Oscar Wilde said: ‘there is only one class of people that thinks more about money than the rich, and that is the poor. In fact, the poor can think of nothing else’. We want to free people from that worry.”