Money Tips for Kids and Teenagers
MoneyHub explains EVERYTHING important about money now to set yourself up for life
Updated 12 September 2024
You may love chemistry, art, rugby or netball. But, whatever your interests, the entire world runs on money. Unfortunately, many adults are clueless when understanding money, which means life can be stressful, tiring and frustrating. However, a few necessary skills outlined in this guide will help you manage your money.
Our guide covers:
Why have we published this guide?
You may love chemistry, art, rugby or netball. But, whatever your interests, the entire world runs on money. Unfortunately, many adults are clueless when understanding money, which means life can be stressful, tiring and frustrating. However, a few necessary skills outlined in this guide will help you manage your money.
Our guide covers:
- The Money Mistakes that Make You Poor
- Ten Must-Know Tips that Help Anyone Become a Master of Money
- Three Important (and Mostly Unknown) Facts About Money
Why have we published this guide?
- We believe that financial literacy is lacking throughout New Zealand, not based on household income. We want to share the same knowledge that wealthy parents teach their children so everyone has the chance to avoid becoming a slave to debt.
- Financial skills are not taught at school, and we have been surprised by how many basic concepts young New Zealand adults are unaware of. We want to help solve this.
- Our TikTok videos help inform, but the reality is jobs won't teach your how to manage your money, so MoneyHub continues to publish guides and videos we believe will help everyone thrive. This guide is that we feel will help any New Zealander to make better decisions around money.
MoneyHub Founder Christopher Walsh shares his views:"Make no mistake - we live in a 24/7 consumerist society. We see and hear ads every day telling us to buy buy buy. We never see advertisements telling us to save up and buy something later. Companies love to sell us something today and have us pay for it later – they expect you to pay interest on what you owe and accept that is 'life'. We don't want you to do this".
"0% interest, zero repayments and, generally, anything offering pay later terms are debts that usually cost you more in the long run. It's a trap that gets people hooked on debt and may times it's hard to break free. It takes discipline to resist the relentless advertising – who doesn’t want a giant TV, Xbox or new clothes right now? The problem is the debts you incur suck money out of your bank account week after week. Want to go on holiday or buy something special? Debts will make that harder". "The financial crisis in 2008, which made millions of people homeless, started by loans being taken out by people who spent more than they earned. Spending money you don’t have happens all over New Zealand, and it ALWAYS leads to misery. Always. The purpose of this guide is to make you know the reality and make smarter decisions as a result". |
MoneyHub Founder
Christopher Walsh |
The Money Mistakes that Make You Poor
We've put together our top list of the most common money mistakes. Yes, we live in a 'have it now' world, but you don't need to make yourself poor and stressed by thinking you need to follow. Instead, relax and read our list to avoid common pitfalls. MoneyHub is well aware that many New Zealanders don’t know where their money is going - don't make these mistakes:
- Overspending on credit cards – it’s easy to spend on non-essentials because you don’t see the money going out of your bank account per item. Unless credit card bills can be paid off in FULL every month, the debts incurred cost a small fortune.
- Always buying the latest technology – new TVs, new iPhones and flash sound systems look good, but do you notice the difference after a few days? Worse than that, many people take ‘buy now, pay later’ offers – this means your $3,000 TV will cost over $5,000 and keep you chained in debt for five years.
- Bling and Beauty – rich people don’t flash around diamonds, brands and new haircuts every week; look at Bill Gates and Mark Zuckerberg. ‘Fake rich’ is all around us, but it’s lame and the money spent doesn’t make anyone happy…other than the retailers!
- Impulse purchases – do you need four phone cases, three watches and four perfume bottles? Marketing is INTENSE for this stuff, but unless it’s a need, you’re wasting money. And seeing heaps of stuff sitting around gets depressing.
- Food waste – New Zealanders are bad with this – Food waste is a $1.8 billion problem in New Zealand - around an eighth of what Kiwis buy each week being thrown away. Rather than buy big, just buy what you'll use.
- Games and In-App purchases – this can get out of control very quickly, with US$ here and US$7.99 adding up to NZ$200+ a month. Have restraint when you game and you’ll have more money.
- Balling at a club – bars in New Zealand are crazy expensive; the real ‘boss’ is the owner of the club, not you. Spending excessively on a night out isn’t fun when you relive it on your card the next day.
- Gambling – poor people spend the most on lotto tickets and instant Kiwi. The odds are bad and the success stories so few. It's basically a tax for poor people.
- Smoking and vaping – $20+ for a pack of cigarettes means a ‘social’ pack-a-week-a-day purchase could cost $1,000 a year. Vaping is also expensive and not healthy.
- Bank fees and overdrafts – banks make a fortune from overdrafts (see our overdraft guide) and fees. Pick the right bank account – zero fees, low transaction costs and freebies. Our student bank account guide picks the best options for those 18 and over.
- Bad value insurance – when it comes to insurance, if you don’t compare, you’ll pay more. Our insurance guides help make sense of the best options.
- Trying to look rich – fake it until you make it is a joke. The goal is to BE wealthy, not to LOOK wealthy. You are only going to drag around debt and worry at night.
Ten Must-Know Tips that Help Anyone Become a Master of Money
We outline the ten most important facts that let you navigate money life as a young adult. The message is clear - if you want a happy relationship with money, avoid impulsive purchases, shop around and don't buy the latest stuff.
Debt isn't always 'bad' - know the difference between 'good debt' and 'bad debt'Debt CAN be good. Some debts make you wealthy, and some debts make you poor.
Examples of ‘good debts’ are:
Examples of bad debts include:
As you get older, when you plan to buy something and don't have the money, ask yourself - am I creating a bad debt, or a good debt? Some things can be good debt or bad debt, depending on the need of the loan:
|
Make the Wrong Money Decisions Today and a LIFETIME of Financial Problems AwaitIn many school subjects, there is a right and wrong answer. For example, maths, chemistry and geography are black and white. But money is not like that. It’s uncertain and requires crucial judgment, so the sooner you get experience in dealing with money, the better off you’ll be.
We live in a competitive consumer economy. There is no debt education in schools – if you run up a $1,000 bill at 18 on a standard credit card and only make the minimum repayments, it will take you ten years (!) to pay it off. If you put $5,000 on a GEM Visa or Q Card and only make the minimum repayment, it will take you 18 years (!!) to pay it off. It’s scary stuff – being stuck in consumer debt in your 20s is bad, but in your 30s it’s terrible. People will always buy stuff they can’t afford. The latest phones, new clothes, brand new car and big nights out. But they go home to bills to pay, which cause worry and health issues. School doesn’t teach you about avoiding the trappings of being an adult – and Instagram is full of fake lifestyle photos which doesn’t help self-control. |
Understand the difference between Assets and LiabilitiesFor example, an asset is a house you own and rent out – your asset makes you money. A liability is a credit card debt for a holiday. Assets are valuable as they pay you money, whereas liabilities cost you money. If you have money in the bank, it's an asset. If your bank account is in overdraft, it's a liability.
|
People earning the same money can end up rich, while others will end up poorThe best way to explain this is with an example:
What does this all mean? Basically, you can spend your money to look risk, but you may end up poor. Wealthy people often look very ordinary, but they use their assets to make them richer. For example, their rental property pays for overseas holidays and renovations in their own home. |
Learn how money works and how to work in the real world by creating your own business or work regular part-time hours (but don't let school suffer)Babysitting, lawn mowing and dog walking are just some examples of in-demand jobs. Many companies hire students year-round. Our student jobs guide outlines how to take the next step. If you work for yourself, you can full control of when you work, which may be more suitable than committing to fixed hours.
Want to get a part-time job right now? We've made it easy. Our student job guide lists plenty of options. Our student CV, cover letter and job interview guides help you succeed in your application. |
If you don't compare prices when shopping, you're probably overpayingMoneyHub was founded with the purpose of comparing prices, and we spend a long time getting to know the different options available for everyday purchases. We invest a lot of time updating them to make sure people can compare accurately. If you are determined to get a credit card or car, read some of our most popular guides first:
|
Learn about saving and investing as early as possible
Question 1: I’m always being told to save, but what am I saving for?
Question 2: Why does my bank only pay me 1% on my savings when I see them advertising loans for 10%?
|
There is always more money, and you're not limited to how much you can earnWhatever your salary may be, this is not your 'financial limit'. If you save and invest, rather than spend and rack up personal debt, your wealth will grow over time. You can then use that money that buy what really matters to you. There is no limit of money in the world - how much you make comes down to your choices and how you invest your time and income.
|
Avoid credit cards for as long as possibleBanks credit cards and high-interest finance options like the GEM Visa and Q Card all offer credit to anyone 18 or older. But even with a good grip of how credit cards work, it's all too tempting to overspend. Once started, it can lead to debt being dragged around for years to come.
Credit cards are best later on when you are in full-time employment. Banks love to issue credit cards - stay strong, resist and be proud to be above it all. |
No one owes you anything - how much money you will have comes down to YOUR CHOICES
|
Three Important (and Mostly Unknown) Facts About Money:
- Working for money, i.e. exchanging your time for an income, isn't the only way to make money. For example, if you start a business and hire people, you can make money from the business, with the work.
- Delayed gratification is essential to get ahead financially. Buying things impulsively to feel better, or giving up on something when things are too hard, means you won't get anywhere. No one is rich or successful overnight. It takes a lot of time, patience and hard work.
- The best way to make money is to help others. The most valuable work is that which solves problems. This is why medical work, engineering and legal jobs are well paid when compared to work such as Uber driving and working in a fashion store.
Further Resources - Workshops, Apps and School Activities
If you need further reading beyond the easy-to-action list above, some options exist. By including them in the list below, MoneyHub is not endorsing them in any way.
- We suggest considering SquareOne, a pocket money/financial literacy app for children - our review has more details.
- MoneyTime - MoneyTime is an online financial literacy program for children ages 10 to 14. The platform is free in 500+ schools, with paid use-at-home licences available. We suggest reading their dedicated guide for parents to learn more about this innovative platform.
- Sorted in Schools – This government-led program is being rolled out to schools all over New Zealand - the website outlines what's on offer.
- Young Enterprise – There are a select number of workshops that fall into the ‘financial literacy’ category, which can be accessed from the organisation’s website. By listing Young Enterprise, MoneyHub is in no way endorsing the business development and challenge programs.