The survey, which was conducted by the Fin-Ed Centre (Financial Education and Research Centre - a joint venture between Massey and Westpac), found 34.9%of respondents said they had changed their eating habits in the past 6 months due to insufficient funds.
The study also found that a large proportion (40.8%) admitted finances are a significant source of worry and hassle for them, although only 11.5% said they struggle to make ends meet. One in ten students said they couldn’t manage on a day-to-day basis without borrowing money.
Massey senior lecturer Dr Claire Matthews, who analysed the responses of nearly 300 students, says that despite a few areas of concern, most university students have reasonably good attitudes to money.
"On the whole, the students interviewed had good attitudes towards savings and retirement planning, and their attitudes were okay in the areas of money management, debt management and budgeting. Insurance was the only area where students consistently scored low, but that reflects the more limited need they have for it," she says.
"Having said that, only just over a quarter said they have contents insurance, and I’d consider that to be a type of insurance that most students, especially those living away from home, should have."
More than three-quarters of respondents said they had some savings, with just over half having easily accessible funds in the event of an emergency. Only 17.5% of students thought they would need to borrow money if they were faced with an unexpected emergency.
"Attitudes to saving and investing were pretty good, with over half the students already KiwiSaver members and 91 per cent agreeing they would like to be debt-free at retirement," Dr Matthews says.
"And despite all the media comment about the unaffordable housing market, the Kiwi property dream is alive and well, with 82% indicating a desire to own their home within the next 10 years."
The survey results come from the Fin-Ed Centre’s ‘student financial health checks’, an initiative to get university students thinking and talking about their finances.
Simon Power, Managing Director of Wealth, Insurance and Private, says it is interesting to note young people’s attitudes towards Kiwisaver and retirement.
"We know young people are enthusiastic about Kiwisaver, with over 60% of eligible 18-24 year olds in the scheme already. In many cases the reason may be as simple as getting the incentive, for many others it’s a way of helping them save for a first home."
Dr Jeffrey Stangl, also a senior finance lecturer at Massey, designed the questionnaire to highlight potential problem areas.
"The objective was really to raise awareness of managing money well, and to give students feedback on how well they are planning not only for today, but also for tomorrow," Dr Stangl says.
Fin-Ed Centre director Dr Pushpa Wood says the centre plans to run financial health checks for the next few years and the data collected will help inform the centre’s future work.
"The survey will provide us with a better understanding of the knowledge levels of our student population, and will make an interesting comparison to the Fin-Ed Centre’s longitudinal study, which will survey a group of young Kiwis every five years for the next 20 years," Dr Wood says.
"Our longitudinal study’s preliminary findings show that young New Zealanders often know the key elements of good financial management, but may not put this knowledge into practice. This is consistent with the findings of the student financial health check where we found positive attitudes towards saving, yet more than a third said their finances had led to changed eating habits."
Massey student financial health checks – key statistics:
- 269 participants, all current students at Massey University’s three campuses.
- 47.9% were eligible to receive a student allowance.
- 67.5% had a student loan; of those with student loans,
- 83.8% had a loan balance of less than $25,000.40.8% agree their finances are a significant source of worry.
- 38% rate their understanding of personal finance and money management skills as only ‘fair’ or ‘poor’.
- 34.9% of students had changed their eating habits in the past six month due to insufficient funds.
- 11.5% said they struggled to make ends meet, with 4.1% saying they had serious money problems.77.7% had some savings, with 55.4% having easily accessible funds in the event of an emergency.
- 17.5% said they would need to borrow money in the event of an emergency.
- Only 20% had contents insurance, but 55.4% had car insurance and 36.1% had medical insurance.
- Only 18.7% had life insurance.55.6% were KiwiSaver members, of which 73.6% are having contributions deducted from wages.
- 91% would like to be debt-free at retirement, and 55.9% believe there will be a gap between the income provided by NZ Superannuation and a desirable level of retirement income.
Image: Dr Jeffrey Stangl watches students Daniel Feller and Brooke Arter take the Fin-Ed Centre student financial health check questionnaire.