Oily Rag financial tips – Moneymates

Thank you to everyone who has written an sent their tips into the Oily Rag community. This week a  budgeting advisor wrote to us to share some advice on a budget service called MoneyMates.

“I would like to share with you information about the MoneyMates program the Budget Services provide around the country. MoneyMates is a free, confidential educational program to learn and share in a comfortable environment. A small group of persons get together to learn and share about financial topics that are relevant to them: best way to get a loan, consumer rights, Kiwisaver, tips on making ends meet, etc. It is a great program and we would like more people to know about it!”
We have discovered that MoneyMates it is part of a Ministry of Social Development initiative called “Building Financial Capability”. They say:

MSD has changed how it funds and supports budgeting services. A new approach, called Building Financial Capability (BFC), was developed through co-design with the sector. The aim of BFC is to build the financial capability and resilience of people, families and whanau experiencing hardship. We are putting in place a suite of products and services from prevention to intensive support that will help people have:

• reduced unproductive debt
• reduced stress caused by financial problems
• increased short- and long-term savings
• improved financial confidence and capability
• improved resilience to cope with financial shocks
• improved financial and material wellbeing.

They say there are four core parts to delivering BFC.

1. Financial mentors – focused on helping people with their finances
2. MoneyMates  – peer-led support group programme that encourages people to learn from others as they talk about money and finances in a group situation
3. MoneyMates Fund – grants to support innovative ideas that will build the financial capability of people in hardship
4. Community Finance Initiative – affordable credit for individuals on low incomes.

Any initiative to help people take control of their money is good but we wonder if MSD and its BFC is getting a little bit too fancy for its own good. We think it’s pretty simple – if you save part of everything you earn then tomorrow will be better than today. How do households on a low income save money? The same way everyone else does – by not spending everything they earn. The easiest way to do that is to put something into a dedicated and preferably untouchable savings account – like Kiwisaver.

Saving involves setting priorities – and doing what oil raggers do – growing your own fruit and vegetables, drinking lemon water instead of expensive sugary drinks, making lunch each day instead of buying it, not wasting money on smokes and booze, giving up the Sky subscription, using the local library, seeing a trip to McDonald’s as an occasional treat rather than a regular event, buying from an op’ shop instead of hire purchase, and all of the other things which each save a few dollars, but add up to many dollars by the end of the week.

While the MSD may have well intentioned programmes encouraging better money management, our observation is those who most need to save don’t, and won’t unless they are compelled to do so. Unfortunately not a lot is done in the schools to teach young people about money – it seems the priorities nowadays are on other worthy causes like recycling and worm farms. Saving money does not make the grade as something to be encouraged, despite its huge importance.

By Frank and Dr Muriel Newman.

Read more Oily Rag articles here.

You can contact the Oily Rag community via the website at oilyrag.co.nz or by writing to Living off the Smell of an Oily Rag, PO Box 984, Whangarei.