This article first appeared at rnz.co.nz and is republished with permission.
It’s a question my seven-year-old son asked me when we were watching the movie The Boy Who Harnessed the Wind: “Mum, are we rich?”
The film is based on the true story of William Kamkwamba, a teenager from Malawi who used scrap from a junkyard and a few books on engineering to build a windmill. It irrigated the family’s field, saving his village from a drought.
Poverty is a big theme. Kamkwamba was kicked out of school because his parents can’t afford the school fees. The family lives in a dirt-floor hut with minimal possessions and no electricity.
About halfway through the movie, my son asked his questions, and my answer was, frankly, pathetic. I rambled on about Jeff Bezos and people who own private jets versus the cost of our mortgage. I somehow created a whiny picture of our lifestyle despite being safely in New Zealand’s middle class.
Thankfully, a few months later, he asked me a similar question.
“Yes, son, we are rich,” I said.
Wealth and money can be an awkward conversation between adults. It can be a worse chat with kids who are trying to wrap their heads around big concepts like global economics, poverty, and not going on a holiday to Fiji like their friends.
Many parents are also trying to teach their kids about generosity and privilege while living in a country where 10 percent of the population are experiencing quantified financial hardship and health disparities are tilted against Māori and Pasifika.
For economist Arthur Grimes, a professor at Victoria University Wellington, comparison is the thief of joy. New Zealand has done exceedingly well in recent decades, especially with wages growing 40 to 60 percent from the 1990s to 2019, he says.
For example, someone on the minimum wage in 1983 could afford a bag of potatoes after 15 mins of work, according to Stats NZ. That dropped to seven minutes by 2009 and is likely far lower today given real minimum wage growth since, says Grimes.
“We’re a huge amount better off, and we live longer, and we’re healthier and all those sorts of things right?… and we forget that.
“The problem is that we have this country called Australia next to us and they’re even better off.”
He called Australia one of “the most successful countries in the world in economic terms in the last 30 years”. New Zealand’s economy has struggled since the start of Covid, so many have had to rein in their lifestyle creep, but we’re doing far better than the UK, says Grimes.
“It’s relative to expectations,” says Grimes.
Despite New Zealand’s strong economic growth over the decades, the major sticking point is, of course, the cost of buying a home. Rents haven’t gone up all that much, but house price increase ‘is the biggest problem we have’, says Rupert Carlyon, founder of Kōura Wealth, a Kiwisaver fund.
Another issue is needing to buy expensive items – think iPhones and laptops – just to function in society that didn’t exist three decades ago, says Grimes.
“I think that there’s not only more things that you can buy, but maybe more things that you have to buy.”
So, how do we talk to our children about the complexities for many of us who are relatively privileged just by existing in New Zealand while still not being able to afford a private jet like Bezos, or a kilo of mince for that matter?
Open conversations vs overwhelming kids
Previous generations have viewed money talk as taboo, but today’s parents should talk freely about it with children, says Jenny Hale, the head coach at the Parenting Place.
However, parents should be mindful not to overwhelm them with money worries, she says.
“My dad would say things like ‘You are bleeding me dry’…
“That would just put me into such a state of worry that we weren’t going to have enough, and we would have to sell the house.”
Spending and family values
Instead of telling kids that you can’t afford something, statements like ‘that’s not in the budget for now’ will seem less daunting, says Hale. Parents can also connect how they allocate money to their family’s values, she added. At the moment, my family is ‘valuing’ rough and tumble adventures (aka camping and Department of Conservation cabins) over that all-inclusive Fiji resort.
Children taking on the family’s money worries can contribute to explosive behaviour in your kid, Hale says.
Make money tangible
The supermarket is a useful place to teach the difference between needs and wants, says Amy Fraser, a lead social worker at Barnardos Aotearoa, who often works with families in dire financial situations with family violence or drug addiction might be in the mix. Hitting pause on a non-essential purchase can teach delayed gratification and the trap of impulse spending, she says.
Physical pocket money is a must too, says Carlyon. He has set up jars at home, and his kids earn tokens that they can cash in.
Families without excess money to give their kids can utilise the same system with non-monetary rewards, says Fraser, like swapping tokens for a movie night or a later bedtime.
“We don’t actually need to spend money to be able to teach tamariki and young people about making choices with what to do with their resources.”
The effects of social media
Kids – and adults – have always compared themselves to others, but social media has exacerbated the issue, says Fraser.
Parents have a window to demonstrate financial stewardship in the younger years to create “a protective factor so that tamariki are resilient enough in their teenage years to not be so impacted”, she says.
