KEY POINTS:
Children as young as 5 will be taught how to manage money under a new pilot project in schools.
Mounting credit-card debt among young New Zealanders, more complex banking schemes and 24-hour access to money are among the drivers for the programme - which could be rolled out to all schools.
Led by the Retirement Commission, it taps into the new national curriculum's strengthened focus on developing students' financial capability.
Despite banks giving $400,000 in funding, Retirement Commission education projects manager Lester Taylor said the scheme would not involve pushing banking products in class.
"In the secondary schools, you may be talking about savings accounts and banks and the share market and insurance," said Mr Taylor. "But there's nothing about product promotion or any of that sort of thing - that's clearly outside the realm."
He said there were a lot of misunderstandings about money management.
"Some 5-year-olds think money comes from the supermarket because mum is asked if she wants cash as she's buying the groceries and gives a plastic card across."
Mr Taylor said there was a growing awareness of the issue internationally.
In New Zealand classes, the two themes of income and money management and financial planning and wealth would run throughout the programme.
"Just as they develop maths skills over time and they develop reading skills over time, we hope that over time they will develop financial literacy skills," said Mr Taylor.
At Mangere Central School - one of 10 nationally involved in the pilot programme - students will focus on savings and interest next term.
Principal Maria Heron said the school had a history of teaching financial skills - including a biennial project in which students developed and sold products - and was eager to develop it further.
"We do take it seriously in this area because you've got the loan sharks and the cars on no deposit," said Ms Heron.
A school survey of staff and students showed most of the children thought budgeting was needed when you were short of money but wasn't required once you had it.
The Retirement Commission said it was expected that the personal financial education programme would be handed to the Ministry of Education next year.
It said a group of organisations, including the Retirement Commission, was also assisting the New Zealand Qualifications Authority develop NCEA qualifications for use in senior secondary schools and tertiary institutions.
* What they're being taught
Age 5: What money is, why it is needed and where it comes from. Introducing ideas of looking after money - such as saving to buy a toy or present.
Age 10: Sources of income and how they are calculated. Looking at the need to plan and manage risk - such as whether investing their savings in Lotto is a good strategy.
Age 15: Planning long term and how to manage money. Analysing different types of debt - such as comparing a mortgage to a maxed-out credit card.
