Research Showed 86 Percent Of New Zealanders Overconfident With Their Money

Research Showed 86 Percent Of New Zealanders Overconfident With Their Money

WELLINGTON, Sept 24 (NNN-XINHUA) – About 86 percent of New Zealanders are overconfident with their money, according to New Zealand Financial Services Council’s (FSC’s) latest research report “Financial resilience trends in New Zealand: Overconfidence and a perfect (savings) storm.”

The report analysed data from previous Financial Resilience Index reports, from Mar, 2020 to Jan, 2022, to identify trends in New Zealanders’ financial confidence and wellbeing throughout the pandemic and times of economic hardship.

In spite of encouraging financial confidence levels, other findings from the report suggest, this confidence may now be misplaced, given the economic volatility, rising living costs and increasing interest rates, witnessed in the months after the most recent data was released.

In Jan, 2022, just under 30 percent of respondents could last for a month or less, without earning an income, 40 percent didn’t know, if they could raise 5,000 New Zealand dollars in a week, in a time of emergency, and 45 percent said, they either would rely on friends or family or weren’t sure how they would manage, if they were suddenly to be unemployed/unable to work for more than three months.

Half of the respondents said, they had experienced financial issues that affected their overall wellbeing. What’s more, financial literacy is on the decline, with 44 percent of survey respondents reporting being financially literate, a decline of six percent.

FSC CEO, Richard Klipin said, “The intention of this research was to look at some of the key trends and behaviours relating to financial confidence and wellbeing, over the past three years, to get a temperature check on how we are tracking.”

“What the research tells us is, there are some clear warning signs that, there is a perfect storm brewing due to financial overconfidence, insufficient rainy day funds or retirement investments and economic uncertainties, such as rising interest rates and inflation,” Klipin continued.

The over-reliance on friends and families and the uncertainty on managing finances in times of crisis are worrying, as when everyone is doing it, this can be a recipe for hardship, he said.

Factoring in how the economic environment has significantly changed since Jan this year, it is likely that the present picture is even more concerning. It’s important that increased financial confidence is reflected in other indicators, such as financial literacy, financial preparedness, job security and wellbeing, he added.

“This latest research emphasises just how important growing the financial confidence and wellbeing of New Zealanders is, and as we continue to track these key indicators into 2023, and beyond, our objective is to see them all move in a positive direction,” concluded Klipin.

– NNN-XINHUA

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