‘The grim reality of adulting’: Young people learn money lessons the hard way

How do young people learn how to budget and save money? Reporter Kiah Radcliffe finds she’s not the only one learning the hard way.

It didn’t hit me until I was well into my second year at university how much money I had to pay towards bills.

Call me naive, but I really didn’t think it would be as hard as it was, learning how to handle my finances.

To quote Rachel Green in season one of Friends after she received her first pay; “I earned this. I wiped tables for it, I steamed milk for it, and it was totally not worth it! Who is FICA (United States payroll tax) and why is he getting all my money?”

(Disclaimer: I worked part-time in retail, not as a waitress.)

And with my student loan repayments, tax, rent, utilities and groceries, it did seem totally not worth it. But as time has gone on, I finished university, graduated and started work in my preferred industry, and I’ve learnt how to manage my money.

But it did get me wondering. How did other young adults, fresh out of high school, prepare themselves to handle their finances? Lord knows I didn’t have any preparation from high school before leaving home.

So I put some feelers out, to see how other young people were getting on.

Jamie Harper told me he remembered making lots of poor spending decisions when he started Victoria University; spending so much going out for dinner with friends that he would have to go without groceries and stationery until his next pay, or splashing out on a new cellphone when his old one worked fine.

When he graduated Horowhenua College in 2020, he hadn’t learnt much about money and felt quite unprepared to manage his own finances, he said.

“It’s sort of dumped on you, without any introduction or education surrounding what it is you actually have to know.”

Becoming financially literate was “quite overwhelming”, and learning how to live on a small amount of money was a “learning experience”, he said.

But over time, the law student was able to develop a mindset of needs versus wants, and learning to anticipate bills coming in so he could budget for them.

And Harper had recently returned to his old college to share what he had learnt, presenting a workshop on handling money in partnership with SavY, a student-run charity that offered financial workshops to high schools.

George Glover said he also felt unprepared to manage his money, heading into the adult world a couple of years ago. But the 2020 head boy for Marlborough Boys’ College told me he thought making mistakes was just part of the learning process.

“You’ve got to spend money on going out on the town and then realise, actually, as a student, this isn’t really helping me.”

Very good advice there, Glover. I have definitely made my fair share of mistakes, such as purchasing a beautifully expensive top from Ruby – it’s my prized possession.

Glover said once the lessons were learnt, being able to financially support yourself was an important part of learning to be an adult.

Mareikura Ikin said she definitely still fell into the trap of spontaneous purchases from time to time. The former student at Garin College in Nelson said she recently bought two NorthFace puffer jackets for a pretty penny.

“[It] was great in the moment. But when I got home, I was like ‘Oh my God, why did I do that?’” Ikin said.

Ikin was now coordinator for Toiere, the top of the South’s Māori business network, having discovered school just wasn’t for her in year 12.

She told me it was like taking a “leap of faith”, plunging straight into the workforce, but it opened up so many opportunities for her.

But like Glover and Harper, she said she wished had some education around money before leaving high school.

“I’m kind of definitely noticing it now that I’m getting older … in terms of living within your means, I think, is something that I really wished I learnt.”

Much of her learning had come from reading books such as Girls that Invest, and listening to podcasts such as Māori Millionaire, she said.

The small things added up, she said, even just budgeting for the groceries, especially with the cost of living on the rise.

I spoke to a group of students at Taranaki’s Inglewood High School, who said there was a course on finance they could attend at their school, although not every student was able to take it along with their other classes needed for University Entrance.

Many of them went to their parents with questions about finances, they said.

Hannah McQueen, owner of Enable.Me and financial adviser, was blunt.

Nothing prepares young people for the “grim reality of adulting”, particularly when it came to finances, she said.

Universally, young people did not maximise their money momentum, McQueen said.

There was a general rule of thumb that recent graduates should aim to save 20% to 40% of their income, but for that to be possible there was an assumption the graduates did not have much of a student loan and their accommodation situation was “favourable”.

McQueen said many young adults just wanted to be told how to handle their finances.

The best way to start was with goals, she said.

I learnt there were three goals every young adult should have; a money management plan, a career plan, and a wealth plan.

They were a way to ensure and accelerate money progression, and help young people break through the saving cycle, McQueen said.

She believed financial education was getting “worse, not better”, and even for parents, it was getting harder to be financially successful these days, she told me.

Principal of Horowhenua College, Grant Congdon, agreed there was a growing need for students to be more aware of how best to use their finances when they left school.

The college had a new course starting at the beginning of Term 3 called Money Matters, available to students from year 10, to teach them how to budget, and improve their knowledge of income, tax and the cost of living.

I wish I had a course like that under my belt, heading into university.

Those early lessons would have gone a long way, and maybe put me ahead of where I am now financially.

But while mentorship definitely would have helped in becoming financially literate, I enjoyed the process of learning how to handle my money. It cemented the fact that I am now a self-sufficient adult, who earnt her own way in the world.