Leaving the nest: Helping young adults navigate their financial world

Remember when you were younger and debt seemed to be a ‘bad word’ for your parents? Fast-forward to today and pretty much everyone has a credit card, car loan, hire purchase and/or mortgage.

We live in a time where the rapid availability of credit has led to instant gratification – which of course, is the opposite of having a long-term plan. But long-term plans haven’t gone out of fashion: with high property prices, rising living costs and some degree of uncertainty about retirement, financial planning is a crucial skill to have.

So here are some important lessons you can teach your adult children as they go out into the world – with our help, if you want!

Good debt or bad debt?

Not all debt is created equal: the right kind of debt (for example, a home loan) is an investment for the future and can help your kids achieve their goals, while bad debt (like a payday loan, in most cases) can prevent this from happening.

Credit and debt can be pretty abstract concepts to young adults, but explaining the difference between good and bad debt may be a good starting point – stressing the fact that with all kinds of debt, including the ‘good’ one, there are risks and responsibilities involved.

How Cole Murray can help

Debt structuring is one of our areas of expertise. No matter how much debt you have or which type, our qualified advisers are committed to helping you (and your family) get debt-free faster – and achieve as much financial freedom as possible.

The value of saving

Help your kids understand that putting money aside is not just for a rainy-day or financial emergency – it can also help them buy a desired item (like the latest Playstation, a big screen TV or a smartphone), and even bigger purchases down the track (their first home, or even a wedding).

The message here is, there is value in saving up for your goals; it’s about developing a ‘when you’ve saved the money’ mentality, rather than ‘wanting it now’ mindset. Then, when kids enter into credit card contracts, this approach may help them stay out of the short-term debt trap.

How Cole Murray can help

As we like to say, ‘a dollar saved is a dollar earned’. Whether you’re saving for unforeseen emergencies or to build a retirement nest egg, our advisers can help you and/or your children start planning for the future.

Buying a first home

A home is one of the biggest purchases that your kids may make, so it is important for them to consider all of the factors before making a commitment.

KiwiSaver has proven itself a great tool for helping young people into their first homes. After at least three years contributions they are usually able to withdraw the majority of their funds to put towards a deposit. At this time they may also be eligible for a KiwiSaver HomeStart grant, which can provide up to an extra $5,000 towards their deposit.

You may even be in a position to help them into their first home.

How Cole Murray can help

It is often a good idea to seek advice from a reputable Mortgage Adviser, as they are experienced at dealing with the banks, they can advise you of any grants or funding that may be available, and they can help your kids submit a strong loan application.

The importance of being prepared

Here’s another key lesson: things can change. The unexpected can happen, and while we cannot prevent this, we can be prepared to weather its consequences – with insurance.

If you’re looking for ways to explain the concept of ‘risk’ and talk about insurance, try to keep it simple (you can take car insurance as an example). The core message is that insurance (any type of cover) is about paying a little today to avoid paying a lot tomorrow.

How Cole Murray can help you

From domestic insurance to personal and business insurance, our advisers strive to help New Zealand families choose the right level of coverage for their needs. There are also many benefits for young adults in learning how to secure cover at a young age.


Want to lead your kids on the right financial path? The sooner they learn how to handle money responsibly, the more likely they are to develop good money habits later on in life.

As a parent, you’re not alone in this education journey; at Cole Murray, we have a fantastic team in place to help your kids achieve financial independence.

For assistance with creating a financial plan or anything discussed in this article, please don’t hesitate to contact our team today.

Please also share this article with your kids if you think it might be useful.

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