A once-in-a-generation school curriculum refresh will send children into the workforce more financially literate than ever before, if entrepreneur Kendall Flutey gets her way | Partnership content
Manuela Atienza was just 11 years old when her home was destroyed in an earthquake.
It was a grim lesson in New Zealand's geophysical vulnerability. It was a consoling lesson in the value of being insured. In fact, it was just a lesson ... full-stop.
Manuela and her class at Northcross Intermediate, on Auckland's North Shore, were learning about property investment, the hard way. Their teacher Natasha De Soden had enrolled them in Banqer, an interactive programme for teaching financial literacy that has been used by 180,000 Kiwi kids in the past six years.
Manuela had saved up her Banqer dollars, earned by doing jobs around the class, to buy a virtual house. The virtual $100,000-plus she paid had seemed virtually unobtainable, she says – until she talked with her parents about the grown-up property market.
"When I first got houses I thought they were really expensive, but the more I got more money, I realised they were a little cheaper."
Dad Alfonso chips in: "Not like in real life!"
Now, the ever-prudent Manuela has bought back into the property market and has another $76,000 Banqer dollars stashed away in her online account. "Actually I have two houses, which is pretty good."
For many of us as school kids, financial literacy education meant bringing along 20c every Friday, banking day, to be dropped into a cloth bag and deposited in the Post Office Savings Banking.
Today, it's far more sophisticated. Real estate. Vehicles and public transport. KiwiSaver. Contents insurance. Health insurance. Credit scores. Sharemarket speculation. Making money, investing money, spending money ... losing money.
"I feel like I know what's coming in life. It's kinda prepared me to make big decisions." – Manuela Atienza, 11
And children are taking home what they learn from experiential curricular programmes like Banqer; they are diffusing financial literacy through their families and through their communities.
There is a certain wry amusement in the design of the Banqer Primary app; it doesn't encourage children buy houses to live in, but only to rent out as investment properties – much like that "real life" of which Alfonso Atienza speaks!
But it's different from Monopoly, says Kendall Flutey. It doesn't end in someone throwing the board up in the air and storming off. "We've all been there," laughs Banqer's commercially acclaimed founder.
"But I don't think that has to be a part of the learning experience, because there are many pathways to success in the economy. It's not just who has the most properties who inevitably wins, although that's the New Zealand rhetoric at times. Our economy is a little bit more balanced and you can really pursue what you want to succeed."
Compounding interest
It was late at night, around midnight. My 11-year-old son Monty couldn't sleep. So we talked quietly and, I don't recall how we got onto it, but somehow I ended up trying to explain compound interest to him. So, if he lent his little brother some money, he would have to pay back more and more and more? What if he made the interest rate 100 percent a day, Dad? What about 100 percent an hour? Or 100 percent a minute?
We did some slow mental arithmetic, to discover how soon his little brother's $1 debt would balloon to $1 million.
Twenty minutes. That's a good investing yield.
"They feel it, they get to live and breathe compounding interest like we do." – Kendall Flutey, Banqer
Monty was entranced. So he could put his brother deep in his debt?
Yes, but here's the thing. It doesn't actually serve the lender well to indebt someone beyond their capacity to pay it back because, well, bankruptcy. His little brother would declare himself bankrupt, and Monty would never get his money back.
Monty frowned.
But Kendall Flutey listens enthusiastically. "That is fantastic! I love hearing stories like that," the 30-year-old ex-accountant says. "Talking about compound interest is a fantastic start – you would have seen the cogs turning over in your son, who is relatively relatively young, right? But he was obviously able to grasp the financial concepts."
Flutey goes beyond just talking about compounding interest, though. Her programme takes it to the next level, leveraging simulation and experiential learning.
Children get an income they put in an interest-bearing account, then manage their weekly outgoings like school desk rental, leasing a learning device and paying the power bill for it – as well as dealing with debt piles.
"Students can tap into an overdraft and if they're not able to pay it off, it incurs interest and that can get out of control pretty quick," Flutey says.
"They feel it, they get to live and breathe compounding interest like we do."
The fact I have three primary and intermediate aged children is why Banqer and their partner Kiwibank are so keen for me to experiment with the learning programme. That, and they are curious to know whether a jaded old journalist will be won over as easily as other parents and teachers!
And I'm the test audience for an even tougher crowd: the education experts who will run the Government's upcoming curriculum refresh. This week, Flutey teamed up with Marc Capstick, the deputy principal of Mountainview High, in a forum to discuss financial literacy.
"We think there's a really great opportunity for Kiwibank to use its expertise and insight, as a financial institution, to be able to really positively contribute to this once-in-a-generation curriculum refresh. They really don't happen that often in the wholesale way the Government is approaching it." – Julia Jackson, Kiwibank
The event coincides with NZ Money Week, and they promise to look at the real world outcomes of making financial learning tools accessible to all students. They are investigating the practicalities of rolling out financial education in all secondary schools.
"I would love for Banqer to have a place to play in that," Flutey tells me.
"More than that, I would just love for financial capability to have a strong footing in the curriculum, as a bit more of a priority, whether we're one of the vehicles that supports that or not. I think that would be an awesome outcome."
And she has the backing of Kiwibank, the 21st Century heir to that public service banking tradition of the Post Office Savings Bank, back when I was at school.
"We're really passionate about this," says Julia Jackson, the bank's Head of Sustainability. "We think there's a really great opportunity for Kiwibank to use its expertise and insight, as a financial institution institution with a strong purpose – making Kiwi better off – to be able to really positively contribute to this once-in-a-generation curriculum refresh.
"They really don't happen that often in the wholesale way the Government is approaching it. We have already engaged with the Ministry of Education and are working with key stakeholders to make sure financial education is embedded into the curriculum."
Out of the shark tank
Kendall Flutey knows all about experiential learning. Her path from directionless 7-year-old to Kiwibank Young New Zealander of the Year is well documented.
She's told how panicked she felt when she was the only kid in the class who didn't know how to make a poster depicting what she wanted to do in life. How parents complained and she got in trouble, after writing a classroom newsletter and selling it to classmates for 20c an issue. ("I got two issues out and made about $1").
As she told the University of Otago alumni magazine, tech entrepreneurs were few and far between when she was growing up in Christchurch. Fewer still were Māori and women.
Her first tech start-up, she now reveals, was not a success. When she was at intermediate school, the same age as Manuela and Monty are now, she and and a couple of friends discovered this new website called eBay, in the US. They pooled their money and ordered some cheap Nickelodeon merchandise and lollies. They would get it shipped over and hold a raffle at school, they figured.
"I'm glad I learnt my lesson through a newsletter and a raffle, right? It's a lot more expensive in business." – Kendall Flutey
"SpongeBob SquarePants was just in at the time, so we bought a bunch of paraphernalia and some sweets online, thinking we'd make our money back and more from a raffle," she remembers.
"We didn't even get to sell tickets, because we started advertising around the school, and they quickly let us know that wasn't on. It was shut down. So I think I got some lollies and SpongeBob SquarePants stuff off the back of it."
That was the last time one of her businesses was shut down. It taught her to appreciate regulatory compliance, she laughs. "I'm glad I learnt my lesson through a newsletter and a raffle, right? It's a lot more expensive in business."
She trained in accounting, qualified, got a job at KPMG – and within a week realised she hated it. So she quit and trained in computer coding. Then, at 24, she started Banqer.
It's an interesting world, Banqer, a contained economy of its own. Now, at 30, Flutey is Minister of Finance and Reserve Bank Governor, rolled into one. "Yeah, I've got to make sure I don't let the power go to my head, that I don't get carried away!
"Our tech allows us to inject interesting scenarios into the platform at any stage, so we could mimic a little bit of inflation, a property market running away on itself. I recently crashed one company on the stock exchange, foreshadowing the data leaks and cyber-security issues in hospitals and DHBs."
There's a bit of flexibility. Wages and prices are lower, and interest rates are typically higher – that accelerates the learning somewhat, so children don't have to wait 20 years to discover the effect of compounding interest.
So, is Banqer like an exploitative High St finance firm? No, Flutey says firmly, there are no loan sharks. Then she pauses and considers.
"I was visiting a local school, and a student was telling me he had recently begun lending money. And I asked him what his interest rates were, and they were – concerning. It was Banqer money. If it were real money, I would have had firm words with his teacher. This kid was about nine!"
"Banqer gives kids the opportunity to safely make mistakes. And we don't ever have that as adults, do we? You make a mistake and that might mean you've got yourself into some debt that can take years and years to get out of." – Julia Jackson, Kiwibank
There is calamity. There are cyclones and earthquakes, storms, volcanic eruptions and fires. There are stolen scooters and crashed Ubers. There are sprained ankles and ruptured appendixes. It's like Monopoly again, except every week children are landing on the 'Chance' square and having to nervously pick up a card dictating their fate.
"Hey, we just mimic the real world!" Flutey insists. "We considered how we could potentially leverage some of the economic movements as a result of Covid. It kinda felt a bit too raw, in the moment."
Flutey describes herself as "a bit square", conservative in her personal finances – but she does have a niece and nephew to keep her on her toes. In turn, she experiments on them. Her 6-year-old niece is interested in money and how to spend it. "I'm the evil aunty who's more interested in financially educating her than buying her stuff from the shops."
Banqer now employs about 12 or 13 people. And when Flutey visits schools, children ask her, has she made lots and lots of money?
"I usually throw it back to the kids, and say, well what's lots and lots of money? And they say, millions and millions of dollars. Well no, I haven't. I say, I'm not rich by your definition, but I actually feel rich, and then I explain that the holistic view that wealth, back in the day, didn't just refer to money. It referred to a lot more things."
She's met Minister of Finance Grant Robertson just once, briefly, to say hello. "I'm sure he'd have tips for me," she says.
I suggest, she might have a few tips for him.
"The awesome thing about Banqer is, the money's made up," she responds, cautiously.
"So if we have any issues we can easily inject or remove funds, create more properties with the click of a button. I think the levers I get to pull are a little bit nicer and a bit more reactive.
"I think I'd rather play in the fictitious world of Banqer than take on the responsibilities on their shoulders."
'Our kids are powerful'
Some might see Banqer as experimenting on more than just Flutey's niece and nephew, but with 60,000 children in New Zealand and Australia enrolled this year, and demand increasing all the time, it’s an experiment demonstrating real impact.
At Kiwibank, Julia Jackson and her colleagues are excited by what they are seeing.
Jackson says the Christchurch-based company is at the forefront of financial education behavioural research which shows internationally that both kids and adults need to learn about finances by using money and actually experiencing making financial decisions, rather than being taught theory.
With Kiwibank aspiring to play a role in making New Zealanders better off, that means getting involved in the communities at a grassroots level. They're interested in how children apply their learning in real life; they're also interested in how they take it home to their families and communities.
"We've identified that it's incredibly important that kids receive a quality financial education while they're at school; school is a formative time," Jackson says. "We hear from many of our customers that they wish they had received that form of financial education, that they would be better set up for the future, and that they hope that their kids get that.
"What we really like about Banqer is how it integrates into the school curriculum, so it's not seen as a standalone subject that is taught by experts. It's something that teachers take ownership of, and they embed into the way the class runs."
Jackson gives the example of a teacher who charged pupils extra, to be allowed to sit on the beanbags. "It really becomes part of how the classroom runs – and that ties in with how we interact with finance in our adult lives. We don't sit down and think, I'm going to do some payments now. We just go into the supermarket and buy our groceries for the week."
The question for schools, for banks, for other financial and government institutions and, indeed, the media, is this: how do we use learning tools to engage parents in the conversation around finances, to safely address some of the gaps in parents' financial knowledge by learning about it through their kids? And how do we ensure parents aren't afraid to have those conversation with their kids?
Kiwibank's qualitative research identifies there is a confidence gap. Parents may actually be doing an okay job of managing their money, but they lack confidence in their knowledge and tools – especially when it comes to "the big moments of truth" like restructuring their home loan to pay down debt as fast as possible.
Banqer gives kids the opportunity to safely make mistakes, Jackson says. "And we don't ever have that as adults, do we? You make a mistake and that might mean you've got yourself into some debt that can take years and years to get out of."
"As much as we can teach the students the technicalities of finances, I think appreciation is a pretty cool learning. If that's all they take from it, I think there's something to be said for that." – Kendall Flutey
Flutey sees children taking home those lessons every day; she hears hundreds of stories. But there's one she remembers especially, a 10-year-old girl at a lower socioeconomic school in Christchurch.
The girl came up to her teacher one day and said, I made my mum a cup of tea last night.
And the teacher said, why?
And the girl said, because I've just realised how much she does for us and how hard it is to manage money. And so I just wanted to do something for her.
"As much as we can teach the students the technicalities of finances, I think appreciation is a pretty cool learning," Flutey concludes. "If that's all they take from it, I think there's something to be said for that."
Children as teachers
Up on Auckland's North Shore, Manuela Atienza has learned to be frugal with her hard-earned Banqer dollars – and she reckons she's taught her parents a little.
"I feel like I know what's coming in life. It's kinda prepared me to make big decisions," she says. "I like to show them my Banqer account and show them what I have, and then they explain about theirs."
Alfonso laughs. He's starting to get used to his daughter encouraging him to be more frugal. "Yes, she says be careful with this, save money for the future!"
He and his wife Maria are about to open Manuela a real-life Kiwibank account, where she can put the money she earns in chores around the house. "I like the way they use it," Alfonso says. "It prepares them for real life."
The last word, then, to Kendall Flutey. She sparkles when she hears stories like Monty, and Manuela, and the little girl making her mum a cup of tea.
"Our kids are pretty powerful," she muses.
