Back in our school days, it’s unlikely many of us were busy thinking about things like mortgages, taxes or retirement, but recent research has been suggesting that we’d probably be better off if we had been. Studies show that most financial habits are formed by the age of seven. The earlier students are introduced to positive habits for money, the more advanced their financial literacy will be in the future.
Leading The Charge
That’s why Kiwi education platform Banqer is leading the charge for the next generation of Kiwi earners. For those who haven’t heard yet, Banqer is a web tool that takes the financial services and tools we use as adults and creates a simulated experience out of them for kids – a lot like online banking.
Armed with pretend dollars that the teacher controls, the kids get a sandbox environment where they can explore investments, take risks and make mistakes.
Most of all, they get a feel for managing personal finances, with real-life lessons and wisdom they can apply further down the track.
Future You
After great success with educational modules on real estate, taxes, insurance and more, Banqer are shifting their focus even further into the future: getting children to think about retirement.
After exploring recent disengagement statistics with KiwiSaver, Banqer founder Kendall Flutey and her team have joined forces with Kiwi Wealth and Kiwibank to make retirement planning more accessible for children.
“KiwiSaver is our newest module”, Kendall explains. “Kids can enroll in the scheme, they can pick a fund based on risk – low level or high level – they can pick their contribution rate. Over time, as the funds perform, we show the kids their progression - and they can keep engaged by switching between funds and contribution rates.”
In the process of developing the module, Kendall and the team were all well aware of the psychological challenges in making this stuff relatable for kids.
Studies show that children have enough difficulty picturing themselves at twice their own age – let alone envisaging their lives as retirees.
“A seven year old struggles to imagine themselves at fifteen… So what we really leveraged here on the simulation [was] shortening the life-span”, Kendall says.
Rather than setting retirement as some abstract point in the distant future, “retirement” for Banqer students starts at three quarters into their school year. “They can definitely imagine that!” says Kendall. “They have to ensure that they have the adequate savings, so that when the income is cut off three quarters of the way through the school year, they’re going to be able to eventually live in their classroom economy”.
With the KiwiSaver module, the process that the rest of us have to watch unfold over decades gets squished into a single school year, and the pupils get to see tangible results from their investments from week-to-week.
Simplifying Complex Subjects
Banqer are never short on ideas to keep financial education involving for kids, but Kendall credits the collaborative development process with both Kiwi Wealth and Kiwibank that kept the module grounded in the real world. “We’re pretty good at making sure it’s fun and engaging and an educational resource, but the part we lack is ensuring it’s accurate and really relevant”, Kendall admits.
“Even if we take a concept and we can simplify it for a younger audience, we still want to make sure that, technically, it’s really accurate.”
This is what the Kiwi Wealth team brought to the table and Kendall says they’re all really proud of the end result - both an engaging experience for the classroom and an accurate reflection of what investing in KiwiSaver will be like later in life.
Wrestling With Retirement
Working with subject matter experts from Kiwi Wealth and Kiwibank, the three organisations aimed to make sure that the KiwiSaver content was relevant, useful, accurate and fun.
Kelly Weston, Kiwibank’s Head of Corporate Social Responsibility, says,
“We honestly believe that planning for retirement is a key issue for all New Zealanders, and for the future of our country as a whole."
"So we want to ensure that the generation of kids coming up today get themselves thinking about it early. We were really excited to be able to participate in something that went beyond just normal financial education into something much more meaningful and, most importantly, effective.”
But as successful as the module came out, Kendall still praises the kids as the real stars here. “I didn’t give kids enough credit on what they were able to understand, to really run with”, she says.
“Something like KiwiSaver, where we talk about the trade-off between risk and reward with funds – that sounds really complex! A lot of my peers don’t get it. But it’s all about how you present the data... You have to make sure it’s really consumable”.
Jump Ship Or Jump Start?
Early engagement for the module is strong already and Kendall anticipates it’ll only grow deeper as the results of the funds start to take root for the students. Unlike real-life, these results are predetermined, which means there’s some real insight to be gained from how kids react to shifts with their funds. “I know there are some drops coming up on the higher risk funds” Kendall smiles.
“So it will be really interesting to see if the kids jolt and jump ship, or keep thinking long-term.”
As for the rest of us, we can only enviously imagine how much savvier we’d be had we grown up with such a platform at our fingertips.
Want to find out more? Read how Kiwibank and Banqer are working together to support the next generation of Kiwis on the Banqer site. You can also find out how to get Banqer and interactive financial literacy into a classroom you care about.
Download the Product Disclosure Statement for the Kiwi Wealth KiwiSaver Scheme(PDF 650.1 kB) or pick up a copy from your local Kiwibank. Kiwi Wealth Limited is the Issuer and Manager of the Kiwi Wealth KiwiSaver Scheme (the Scheme) and is a related company of Kiwibank Limited. Kiwibank is a distributor but is not an issuer of the Scheme. Investments made in the Scheme do not represent bank deposits or other liabilities of Kiwibank and neither they nor any other person guarantees the repayment of members’ interests in the Scheme or the payment of any earnings or returns on investment in the Scheme. Investments in the Scheme are subject to investment and other risks, including possible delays in payment of withdrawal amounts in some circumstances and loss of investment value.