Why Are Kiwis So Bad With Money? The current state of financial literacy in NZ

Cameron Steele
16 hours ago
12 min read

Updated: 10 hours ago

Money – it’s a topic that makes many Kiwis shuffle their feet. We’ll gab on about the All Blacks or the price of butter, but our bank balance? She’ll be right – or so we hope. Yet the evidence suggests many New Zealanders could use a financial tune-up.

In my work, I meet a lot of people, of varying ages and varying degrees of financial literacy. These are a few of my observations and some fixes for them. I’ll keep it friendly, practical, and a little bit cheeky – because talking about money doesn’t have to be scarier than a surprise IRD letter.

Why Are Kiwis So Bad With Money? The current state of financial literacy in NZ

No Budget, No Backup: Living Pay-to-Pay

A lot of Kiwis know the “where did my money go?!” feeling. Payday comes, and after a flurry of automatic payments, Tap-and-Go’s, and a weekend splurge, you’re skint by the middle of the week. Budgeting and saving... not exactly our national pastimes. In fact, 44% of New Zealanders have no emergency savings fund at all. That’s nearly half of us flying without a financial safety net. It only takes a blown transmission or a sudden job loss to throw things into chaos.

Living pay-to-pay is unfortunately common... but it’s also incredibly stressful. Those without any emergency stash are about twice as likely to be stuck in the paycheck-to-paycheck Think about it: if you’ve got a little cushion in the bank, an unexpected $500 car repair is annoying but manageable. With zero savings, that same $500 expense is a minor crisis (hello, credit card debt or KiwiSaver hardship withdrawal application).

Why are we like this? Partly, from my observations it’s a mix of habit and culture. New Zealanders have a bit of a “she’ll be right” attitude – optimism is great for rugby matches, not so much for personal finance. We don’t always plan for rainy days, and talking openly about money (or admitting we’re struggling) feels taboo. The result: many of us just cross our fingers and hope nothing goes wrong. (....Until it does.)

The good news? Budgeting doesn’t mean sucking all the joy out of life. A simple plan for where your money goes each month can be empowering. Start by tracking your spending for a few weeks – you might be shocked how much leaks out on flat whites and Uber Eats. There are some excellent Apps available to do this, many are free to use. Then, set a few realistic limits. Build in some “fun money” so you don’t feel deprived (we all need the occasional flat white or Friday night takeaways).

And pay yourself first: even $10 a week into an emergency fund makes a difference over time.

Studies show that in three months, those who started an emergency fund were three times more likely to feel optimistic about their finances! Most likely because they finally had a buffer against life’s surprises.

Bottom line: A budget is just telling your money where to go, instead of wondering where it went. It can turn that constant stress into a feeling of control. And having a little rainy-day fund is the ultimate “she’ll be right” move – because you’re making sure things will be alright when storms hit.

The Buy-Now, Pay-Later Trap

Ever strolled through a mall and seen those Afterpay and Laybuy logos everywhere? Buy Now, Pay Later (BNPL) services have exploded in NZ – they’re expected to account for around NZ$1.2 billion of retail spending in 2023. For many, BNPL feels like free money: “Get the goodies now, deal with the bill later.” What could go wrong, right? Well, quite a bit.

The trouble is, a lot of people don’t even see BNPL as debt. A recent survey of young Kiwi adults found 1 in 5 users don’t consider BNPL to be debt at all. (If you think four easy payments aren’t debt, we really need to talk ASAP!) Even more worrying, 1 in 4 young users were constantly juggling BNPL repayments – essentially living on a BNPL treadmill.

The convenience of Afterpay, Zip, and friends can lure us into overspending. It starts innocently: a new phone here, a flash pair of sneakers there. But soon enough, “no interest” turns into late fees and stress if you miss a payment.

Signs you might be in the BNPL trap include:

Frequent late fees: That “interest-free” deal isn’t so free when you’re slapped with $10 late charges repeatedly.
Robbing Peter to pay Afterpay: Using credit cards or loans to pay off BNPL installments (yes, it happens).
Prioritising BNPL over essentials: When Pay Now takes priority over paying for groceries, you know there’s a problem.

If this sounds familiar, you’re not alone. The buy now, pay later buzz can feel like a quick fix, especially when paychecks are stretched. But remember, if you’re always paying later, “later” eventually catches up.

A good rule of thumb: treat BNPL like a short-term loan. Would you take out a loan for that new jacket or gadget? If not, maybe wait until you can buy it outright. Your future self (the one who doesn’t have four different payment plans on the go) will thank you.

KiwiSaver: Set and Forget (and Regret)

KiwiSaver accounts... nearly every working Kiwi has one, yet so many of us treat it like background noise. You sign up, pick a random fund (or default into one), then basically ignore it for 45 years. Meanwhile, you might take a “contribution holiday” that turns into a multi-year break.

Sound familiar? Almost a third of KiwiSaver members aged 18–65 made no contribution last year. Add in those outside that age (like retirees) and about 40% of all KiwiSaver members didn’t contribute at all. That’s a huge chunk of Kiwis essentially leaving free money on the table.

And KiwiSaver is free money, in many cases. If you’re an employee, your employer usually chips in at least 3% on top of your pay. The government also hands out up to $261 each year as a "Member Tax Credit" (so long as you contribute about $1,042 annually).

Not contributing means you miss out on that extra cash – and the magic of compounding returns on it. One analysis warned that non-contributing Kiwis could collectively miss out on a whopping $113–$114 billion by retirement. Yes, billion.

For a young person, that could be a loss of over $300,000 in potential retirement savings by age 65.

Why the apathy? For some, it’s genuinely tough to save because money is tight (fair play – when you’re choosing between rent and KiwiSaver, rent wins). For others, it’s procrastination or confusion – not knowing how KiwiSaver works, or assuming “I’ll sort it out later.” There’s also a trust factor: KiwiSaver is invested in the share market, which can feel abstract or risky if you’re not finance-savvy. So people just park in the default fund and hope for the best.

The result, though, is a lot of regret down the line. I’ve met people in their 50s shocked to find their KiwiSaver balance is nowhere near what they need – because they took 10 years off contributions, or stayed in a low-growth fund since they first joined.

Think of KiwiSaver like a fruit tree: if you water and tend it (i.e. contribute and pay attention to where it’s invested), it can grow into a plentiful source of fruit. If you plant it and wander off, you might come back years later to a withered twig.

So, if you’re guilty of KiwiSaver neglect, no judgement – but do yourself a favor and check in on it. Can you afford to contribute a bit more? Are you in the right fund type for your age and goals? (A 25-year-old in a conservative fund might be playing it too safe for growth, for example.) And if you’ve paused contributions because times were tough, try to restart even at the minimum – your future self, sitting on a beach in retirement, will be stoked that you did.

Student Loans: Blind Spots and “Future Me” Problems

New Zealand’s interest-free student loans are a double-edged sword. On one hand, yay – no interest while you stay in NZ, so you can take your time paying it off. On the other hand, it makes it way too easy to ignore the darn thing entirely. Plenty of young Kiwis treat their student loan as an afterthought – a little IOU that can sit in the background. “I try to ignore my student loan… honestly, I have no idea how much my loan is going to be when I graduate,” one uni student admitted quite casually to me last year. That pretty much sums it up: out of sight, out of mind.

The blind spot here is that a student loan is real money and real debt, even if it’s not biting you with interest (yet). For those working in NZ, repayments just quietly come out of your paycheck (10% of anything you earn over about $22k, straight to IRD). Because it’s automatic, you might never actively budget for it – it’s like a tax that just vanishes. So people often don’t feel the debt, and they make minimal repayments for years without a plan to clear it faster. After all, there’s no interest, so what’s the rush?

The rush comes if (or when) life changes. Leave NZ for your OE, and suddenly your benign student loan turns into a high-interest debt. (As of 2025, overseas-based borrowers get charged 4.9% interest on their student loans. Many Kiwis abroad are shocked at how quickly their loan balances snowball – 78% of expats surveyed said they weren’t making progress on their loans overseas. Some even avoid coming home because of loan arrears fears. Yikes.

Even if you never leave NZ, ignoring a student loan can have other costs. It’s basically a drag on your take-home pay until it’s gone. If you’re looking to get a mortgage, a big student loan reduces how much the bank will lend you (since it’s like you already have a debt payment each month). And let’s be real: psychologically, debt is debt. Having it linger for 20+ years can weigh on you, even subtly.

So what can we do? For starters, know your number – check your loan balance. It might be painful, but knowledge is power. If you have the means, consider paying a bit extra now and then, even though there’s no interest – you’ll eliminate the balance faster. At the very least, plan ahead if you’re thinking of moving overseas: you might want to knock a chunk off the loan before you go, or set up a repayment plan to avoid the nasty surprises of compound interest. Don’t treat your student loan like the monster under the bed; drag it into the light and deal with it on your terms. Future You will be grateful not to have that chain dragging behind them.

Shh… Why We Don’t Talk About Money (financial literacy NZ 101)

Perhaps the most Kiwi-as factor in all of this is our cultural reluctance to talk openly about money. We’ll happily chat about the weather, rugby, or that new café down the road, but ask someone how much they earn or how they’re really doing financially, and you’ll get the death stare or an awkward chuckle. It’s almost like there’s an unspoken rule: Money is off-limits – too personal, maybe even impolite.

We inherited a bit of that from our British roots ... traditionally it’s “bad manners” to discuss finances, and it’s stuck around like a long-lost cousin.

On top of that, while we don't like hearing people worry about money out loud, our "tall poppy" culture hates skytes who appear to be bragging about having money!!

Financial literacy in NZ includes people's perceptions not always being fair, or correct

The irony is, nearly 70% of Kiwis worry about money on a daily, weekly, or monthly basis - money stress is everywhere – yet we’re all worrying in private. One report described it perfectly: "Kiwis will talk about the All Blacks or the latest petrol prices... but money? No way.”

We have this national allergy to financial transparency, and it’s hurting us. If you don’t know how your friends or colleagues are managing, it’s easy to feel like you’re the only one struggling (you’re not). If you don’t talk salaries, you might be underpaid and never know it. If you’re too embarrassed to ask for advice, you could make mistakes that a simple chat might have prevented.

This taboo also plays into why we don’t budget or plan – many of us were never taught how, and we’ve been too shy to ask. Half of New Zealanders grew up never discussing money at home (myself included), and it shows in our financial literacy gaps. Only a tiny minority (in one survey, just 4%) believe the “average Kiwi” knows how to manage money well. Ouch.

That lack of confidence perpetuates the silence: “I’m bad with money, but so is everyone else, so let’s just not bring it up.” It’s a vicious cycle.

Breaking that cycle starts with little things. Try having an honest kōrero with a close friend or whanau member about money – you might be surprised how freeing it is. You don’t have to divulge your bank statements, but sharing tips, goals, or worries can help you both. And if you’re in a relationship, open communication about money is key – many couples struggle because they keep finances a secret, when really they should be a team.

Remember, talking about money isn’t greedy or tacky; it’s smart. The more we share and learn from each other, the better off we’ll all be.

Taking Charge: Steps to Improve Your Money Game

Being “bad with money” is not a life sentence. It doesn’t matter if you’ve made a few whoopsies in the past (join the club – we all have); what matters is where you go from here. Here are a few practical steps to take control of your finances:

Draw up a simple budget... and spend less than you earn. List your income and all your outgoings. Identify the needs (rent, food, bills) versus wants (dining out, new gadgets). No need for fancy spreadsheets; even a notebook will do. The goal is to give every dollar a job. You might even find extra cash you can redirect to savings once you see where your money is sneaking off to.
Build a basic emergency fund. Aim for at least $500–$1,000 to start with – a cushion for those “uh-oh” moments in life. Stash it in a separate savings account (out of sight, out of mind - using a different bank for this can help). This fund is your personal safety net, so when the car battery dies or your phone takes a swim, you’re not reaching for the credit card in panic.
Show your KiwiSaver some love. Review your KiwiSaver fund choice : is it the right mix of growth or conservative for your situation? A few minutes on Sorted.co.nz or a chat with a qualified KiwiSaver adviser like me can help you figure this out. Small tweaks now can mean tens of thousands more later.
Tackle your debt thoughtfully. Make a plan for paying down high-interest debts like credit cards or hire purchases – those are the real budget killers. For your student loan, keep it on your radar. If you stay in NZ, pay it as you earn (easy does it). If you plan to go overseas or you just want it gone, consider extra payments when you can afford them. Clearing debt is like lifting a weight off your shoulders, and it frees up your future income for better things.
Talk about it – or get advice. Feeling overwhelmed or not sure where to start? Reach out for help. There are free budgeting services and financial mentors out there who have seen it all and can offer non-judgmental guidance. Even a single session with a financial adviser can set you on the right path (many offer a free first consult – and no, you don’t have to be rich to talk to an adviser!). Also, don’t underestimate the power of sharing money tips with friends or whānau. You might learn about a great budgeting app, or a clever way to save on power bills, or just gain moral support. Money doesn’t have to be a solo journey.
If you want to learn more, there are excellent, free online resources everywhere - many made here in NZ. I have a whole playlist of podcasts on the subject I regularly share with my clients. Email me for a copy on cam@solidsteeleadvice.co.nz

Final Thoughts:

Being “bad with money” is not a uniquely Kiwi trait, nor is it a lost cause. It’s often just a mix of habits, blind spots, and a dash of cultural baggage. The fact is, anyone can improve their financial skills – you don’t need a finance degree or a winning Lotto ticket. You just need a willingness to change and maybe a helping hand to get started.

So consider this a friendly nudge from someone who cares (I really do) to take control of your financial future. Start with one small step from the list above. Celebrate wins, no matter how tiny – paid a $100 chunk off your credit card? Fantastic! Brought lunch to work instead of buying? Ka pai! These little moves build momentum. Before you know it, you’ll feel more confident and less stressed about money.

And if you need extra support, don’t hesitate to seek professional advice.

In the end, taking charge of your finances is one of the kindest things you can do for yourself. It’s not about having more money to flash around; it’s about peace of mind, freedom to make choices, and the reassurance that when life throws a curveball, you’ve got it covered.

So let’s change the script that “Kiwis are bad with money.” We can be just as savvy as anyone – we’ve just got to shake off the bad habits, have a few honest conversations, and get stuck in. Your wallet, your future, and yes, future you will thank you for it. Time to turn “she’ll be right” into “she’s sorted, mate.”