People have become disconnected from money and spend it too easily, the Otago director of a nationwide financial planning business says.
“The ease of which you can spend money is absolutely frightening,” enableMe and strategic coach Roger Swift said.
The rise of credit cards and easy online payments meant people had become disconnected from it. Consequently, more people overspent than in earlier generations.
Modern society was an “I want it now society”, Mr Swift said.
The Otago franchise of enableMe will start operating in Dunedin from a Cumberland St office next Tuesday.
The business aimed to help people determine their financial “fitness” and work towards achieving financial goals according to the enableMe website.
Many people postponed setting financial goals because money was a “taboo” subject and talking about it was “confronting,” Mr Swift said.
Setting financial goals was important because it was easy to spend too much money without a reason to save.
“People will continue to spend money unless they’ve got a compelling reason not to.”
Little things, such as buying multiple cups of coffee over the course of the work day, could add up over time.
Coming from a background of “nearly 30 years” in banking, Mr Swift said the banks he worked for often had too many clients.
“I think it’s just so many clients for a large organisation to manage, we just couldn’t do it properly.”
The enableMe business started in Auckland in 2007 and Mr Swift said clients ranged across different life stages and levels of income.
While many people had financial literacy, they often didn’t have a plan to meet their goals.
There was a difference between financial literacy and “capability” which was when people actually implemented a plan, he said.
Some enableMe clients in their 50s were “scared” into action by their impending retirement.
Clients typically worked with enableMe for a year to sort out a financial plan but some returned as their goals changed, Mr Swift said.
Financial planning was important because financial wellbeing and happiness were related, he said.
While financial planning was better early in life, it was never too late for people to start better managing their money.