Having been lucky enough to mentor a bunch of amazing students over the last few days at Young Enterprise’s “Young Navigator” event, it became blatantly clear we’re a step behind when it comes to financial literacy in New Zealand.

The students were presented with a business challenge to create a more financially literate Aotearoa. My team did a truckload of research to understand where the problem and opportunities lie, so they could create the “right” business idea to address that problem. And boy, do we seem to have a problem. Here are a few scary stats we found:

• An estimated 41 per cent of Kiwis have an outstanding credit card balance (meaning they are accruing interest on debt at rates around 18-20 per cent)
• Around 1 in 3 don’t pay off their credit card in full each month
• Personal consumer debt (generally higher interest and less secure) is on the up, including an increase in buy now, pay later (BNPL) arrears
• Only 8 per cent of Kiwi students attend schools in which financial literacy is compulsory, compared to an average of 28 per cent across the OECD
• Around 40 per cent of our retired population are having to get by on the pension alone, and 25 per cent are still working
• Although 3.2 million people are in KiwiSaver, 39 per cent of them are not contributing anything to their accounts

None of these stats paint a pretty picture around our general understanding of finances. They suggest there are a lot of people who are neither planning nor saving for their long-term financial future, and many who don’t understand the impact of compounding interest (especially when it comes to high-interest debt). We’re also seeing, and will continue to see, a significant “retirement gap” whereby many retirees simply won’t be able to afford the high cost of living as they enter what are supposed to be the golden years.

Of course, if you’re reading Informed Investor, chances are you’ll be, well, a lot more “informed” than your average Kiwi. In fact, you’re probably already investing in your future, whether that be via the sharemarket, property, managed funds, art, or whatever assets you prefer, and it’s likely you have a good understanding of the benefits of KiwiSaver.

But what about our loved ones? Are we confident our friends and whānau are also set up for success when it comes to their financial future? This question was asked at the Young Navigators event; a show of hands for “who knows someone who is struggling with their finances thanks to a lack of understanding” had almost every person in the room put their hand up. So how do we help?

There are several ways I believe one can encourage people who aren’t usually engaged with their finances into investing:

1. Talk more about money, more often

Kiwis aren’t great at talking about money - we seem to find it impolite; even a little awkward. In other parts of the world, for example the US, they’ll happily have a conversation in the supermarket aisle, comparing salaries. Not Kiwis. We don’t necessarily need to discuss our salaries, but sharing our financial experiences and learnings (including our mistakes) could help others understand investing a little better, and maybe start to grow enough confidence to start thinking about it themselves. Knowledge is power, as the saying goes. So don’t be afraid to share what you’re doing, how much you’ve made or lost via different investments, and what your plans are to grow your own wealth.

2. Encourage a mindset based on net worth rather than money in the pocket

A lot of us think about the money we have in terms of what we’ve got to spend at the end of the week or how much we’ve got in our bank account, and that’s totally understandable. But a better way to think about finances is via net worth. Get your loved ones to calculate all their assets (financial only: cars and snowboards don’t count) and then take away any debt (aka liabilities) from this number. They might be surprised at the results, especially once they take stuff like a partially paid-off mortgage and KiwiSaver balances into account. This can encourage people to think about their long-term savings, and the overall financial position they’re in. It might just help to motivate them to look at the ways in which they could improve on their current position, and start to plan (and invest) more long-term rather than spending “in the moment”.

3. Help them find good resources to learn about finances and investing

There is such a wealth of financial information out there, across a wide range of platforms and formats. Most financial providers (Simplicity included) have a “Learn” section on their website which provides a bunch of great resources, and even getting them to follow a range of financial-related social channels can provide a more native, fun way to learn. There are now several great female “finfluencers” who target and educate women around investing: Girls that Invest, Frances Cook, The Curve, and The OneUp Project for example. Podcasts can also provide a huge amount of free and easy education material that can be consumed while making the daily commute, walking the dog, or doing the laundry. In fact my colleague (and Head of Education at Simplicity) Jennie and I have just launched one called “Money Made Simple”. The is to provide simple, bite-sized episodes that simplify what can be tricky, complex financial concepts.

4. Help them set up an easy way to invest that doesn’t complicate things or cost too much

The world of investing has been democratised thanks to the introduction of easy-to-use platforms like Sharesies, Hatch, InvestNow and Tiger Brokers. Some have added features that make them more fun and easy to understand for those that aren’t so knowledgeable or engaged. Many KiwiSaver providers also have a range of low-cost, diversified non-KiwiSaver funds, so helping your friends or family complete the quick online sign-up process and making an initial deposit (even if that’s with your generous help) can help kickstart their investing journey. They can then watch their balance grow over time, and maybe get more engaged with it as they see returns start to compound.

Getting your loved ones interested in planning for their financial future can be a challenge, and it may take some (or a lot of) gentle coaxing, patience and time. But I believe it all starts with talking more, helping them understand the basics and providing easy-to-digest information and examples to get them started. And just imagine how good you’ll feel later when you’ve personally helped the people you care about most grow their long-term wealth.

Not all heroes wear capes, after all.

Disclaimer: The information provided and opinions expressed in this article are intended for general guidance only and not personalised to you. These materials do not take into account your particular financial situation or goals and are not financial advice or a recommendation. Information is current at the time of writing, and subject to change without notice.