Daniel wrote an excellent post around his ideas for a personal finance web engine. His thoughts around this were in part formed around some comments made by Xero CEO Rod Drury about a Xero “personal edition” that they might possibly be considering. I think the idea (and by extension much of what Daniel says in his post) is excellent, but I do have some concerns about the blockers to it being effective. I commented as such on Daniel’s post but I thought I’d also write about it here.

My comments went thusly;

Dan – excellent post – and I can’t help but agree with you. I would say though that much of the problem in this area stems not from a lack of tools, but rather from an inherent lack of knowledge and understanding. Fact is that financial literacy in our country is abysmal (witness the current property crunch occurring and the unsophisticated investment market). It’s a subject I’ve written about before and one I’m really passionate about, but it’s also one that is systemic and widespread rather than localised and caused through a lack of suitable tools.

So my bottom line is – fantastic idea but only if the structural changes needed to make it work are introduced at the same time

What do others think about the dearth of financial literacy out there? Does it exist or is it merely my perception?

Ben Kepes

Ben Kepes is a technology evangelist, an investor, a commentator and a business adviser. Ben covers the convergence of technology, mobile, ubiquity and agility, all enabled by the Cloud. His areas of interest extend to enterprise software, software integration, financial/accounting software, platforms and infrastructure as well as articulating technology simply for everyday users.

  • You’re spot on. We needed financial literacy a decade ago, and now with children having cellphones, car imports without tariffs, giant shopping malls everywhere etc we need more. We need an entire culture change

  • http://www.mint.com/

    (posted on Dan’s blog – sorry for the double-up)

  • You’re dead right Ben, the lack of financial literacy out there is abysmal. This is why so many lost their life savings in ventures such as Bridgecorp & Blue Chip, and a whole other bunch are about to come a cropper from borrowing against the equity in their house.

    My advice to all parents is start ’em young and don’t rely on the school system to teach financial literacy. My girls are one and three – the one year old finds money on the ground like you wouldn’t believe, and can’t wait to put it in either “Kiwi” or “Pig”, one of the two moneyboxes her Grandparents supplied. The three year old knows exactly which bollard she owns at Auckland Airport through her little share fund, and which shop window at Sylvia Park (Kinda hard to explain the concept of Xero to a toddler, so daddy will hold a stash in the meantime!)

    And Dr Cullen may have cocked a lot of things up, but National Super and Kiwisaver weren’t among them. Thank God someone had the foresight to set up a decent set of savings schemes to save those souls in the first paragraph from going completely down the toilet.

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