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Source: Fair Go -
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Eleven students from Michael Park Steiner School in Ellerslie,
Auckland went into five major banks - ANZ, National, Westpac, BNZ
and ASB to see what their future financial options were.
The students were looking for grown-up financial advice but what
they got was the chance to get into debt - and lots of it.
They were so shocked with what they found, they got in touch with
Fair Go.
On offer - at all five banks - a $5000 dollar personal loan,
another $1000 in overdraft and a credit card with a $500 dollar
limit in their first year - $6,500 dollars of debt - with very few
questions asked.
All four students Fair Go interviewed admit to being good savers
and have part-time jobs; not that any of the banks wanted to
know. No questions were asked about an income source or if
they had any assets.
Only one of the five banks (BNZ) discussed savings options with the
students and the BNZ were also the only bank who explained the
Kiwisaver scheme to the teenagers.
The banks pushed their latest debit cards - just like EFTPOS, but
they allow you to buy online. You have to have the money in
your account first, but remember those overdrafts and loans - and
you only need to be15 to get your hands on one.
Fair Go went to all of the banks for their response to the
student's findings. While they can't comment on the
individual approaches the students took, these are the banking
services they offer 18 year
old school leavers generally:
ASB
Offer year 12 and 13 students across all secondary schools in New
Zealand a free 1 hour " What Next " financial literacy interactive
workshop. Last year over 150 schools took advantage of this
programme which discusses the following challenges that school
leavers face, including budgeting, saving and borrowing.
The usual process for ASB branch counter staff is for the customer
to meet with one of our Personal Bankers to complete a '15 minute
Financial Health Check'. In this meeting 4 areas are discussed -
Transactional, Investment, Insurance and Credit. These discussions
are tailor made, depending on the individual's own
circumstances.
National Bank and ANZ Banks
Both ANZ's Tertiary Package and The National Bank's Tertiary Plus
offer savings accounts, and all branches can provide information
about Kiwisaver.
Our banks are committed to responsible lending, offering different
options depending on students' needs and within reasonable limits,
and also based on what students intend to do when they leave
school.
Westpac
Westpac only offer a maximum of up to $1000 credit in the first
year of study. We are flexible as to how this is taken up, e.g. as
an overdraft and credit card at $500 each, $1000 overdraft only, or
$1000 limit on a credit card only. But credit can only be a maximum
of $1000.
Westpac did a survey last year to find out what was top of mind for
students going into the new academic year. The top concern was
money worries. However, they're both cash poor and time poor,
and have to balance the need to work with the need to study. In
these cases, an overdraft can help students bridge those financial
gaps.
BNZ
The BNZ have been doing some work in the area of financial literacy
and have just posted a new financial literacy tool on their
website. It's about equipping people young and old to make good,
informed financial choices to get them into a strong financial
position.
So how do you keep your debt as small as you can in your training
years?
* What
better way to pay off debt than getting a part-time job - Student
Job Search - run by local student associations is free for students
and employers.
www.sjs.co.nz
* study
link is a service run by the ministry of social development. get
there to see if you're entitled to any allowances you might not
know about. it can also help you out with questions about student
loans.
www.studylink.govt.nz
* and
for students and school leavers going straight into the workforce
the retirement commissioner's website sorted is a great tool for
setting financial goals and budgeting - good for all
ages.
www.sorted.org.nz
