Young New Zealanders’ Ongoing Personal Finance Journey:  A Longitudinal Study– Stage 3

The report presents findings from the third stage of the Fin-Ed Centre’s 20-year longitudinal study, which tracks the financial knowledge, attitudes and behaviours of a group of New Zealanders through different life stages. The longitudinal study is unique in New Zealand, using participants identified randomly from the New Zealand electoral roll from six geographic locations. The sample is not demographically representative of the New Zealand population in terms of gender and ethnicity, with a likely self-selection bias, but the demographics between samples are generally stable. The first stage occurred in 2012 when the cohort was aged from 18 to 22 years, with stage 2 following in 2017. Now, five years further on, in the third stage the participants are aged from 28 to 32 years. The study will repeat again in 2027, before concluding in 2032. At study termination, the participants will range in age from 38 to 42 years. Of the original 350 cohort, 232 participated in the third phase of the study – a 66 percent retention rate. The study undertook interim updates in 2014, 2016, 2019 and 2020, which dealt with topical issues including economic inclusion, housing affordability and the COVID-19 pandemic. The focus of this report is to consider how participants’ attitudes and behaviours have changed over the past five years as they move into new life stages. While the study finds young New Zealanders still have some reliance on their parents for financial information, the parental influence has dropped, with parents now the source of “everything” or “almost everything” learned about finance for just 26 percent of participants. Life experiences had replaced parents as the most popular source of information, and was expected to dominate in the future. The gender gap in financial literacy is narrowing, with a 17 percent increase in the average score for females compared to just 6 percent for males. Overall, there was an improvement in financial literacy. In addition, there was an improvement in participants’ self-assessed literacy, returning to the self-confidence of 2012; however, the gender gap also remained with only 29 percent of females assessing their financial literacy as “Very Good” or “Excellent” compared to 44 percent of males. Part of the improvement in financial literacy may reflect the higher proportion who reported having taken steps to proactively enhance their money management skills, including a much higher proportion of participants reporting talking to financial professionals such as bank staff and financial planners/counsellors.

Keywords

Financial literacy, Longitudinal study, Financial well-being

Citation

Matthews C, Wood P, Stangl J. (2023). Young New Zealanders’ Ongoing Personal Finance Journey: A Longitudinal Study– Stage 3. Fin-Ed Centre.

URI

https://mro.massey.ac.nz/handle/10179/70342

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