The crucial role of financial education in Australia

The pivotal role that schools play in their students’ financial wellbeing

 

Australia is facing a cost of living crisis, with everyday expenses increasing faster than wages—which particularly affects low-income workers. This disparity is hitting low-income workers hardest, pushing vulnerable families towards financial instability, and sees many turning to credit cards or buy now, pay later schemes, accumulating bad debt just to keep the lights on and food on the table. A major contributor to this issue is low financial literacy, a problem affecting individuals and society as a whole. But what if the solution to social inequity lies right in our classrooms? Enter financial education.

Why financial literacy is crucial

Financial literacy goes beyond understanding money. It’s about applying mathematical concepts to real-world scenarios, arming individuals with the knowledge and skills they need to make informed and effective decisions about their financial resources.

A recent report from Canstar, a leading financial comparison site, reveals a concerning trend among younger Australians—their financial literacy is particularly poor. 

Canstar’s 21-question financial literacy assessment, which has had over 1000 responses since May, revealed that only 30% of Gen Z and 47% of Millennials could answer most financial literacy questions correctly. This gap in knowledge not only puts them at risk of overpaying for goods and services but also leaves them vulnerable in times of economic instability.

Integrating financial education into the curriculum

Marc Capstick, product owner at Banqer and former Deputy Principal at Mountainview High School, highlights an urgent need for financial education. However, he acknowledges that with teachers already stretched thin, incorporating this essential component into their curriculum can pose a challenge. “We know that kids are leaving school not prepared to face the challenges of the financial world, and we also know that this is true amongst young adults and even older adults, particularly as we’re facing increasingly tough financial and economic times that people aren’t prepared for. They just haven’t had the opportunity to learn the basic core skills around personal finance and budgeting.”

Capstick recognises that even adults can find many financial concepts intimidating due to complex terminology. “Incorporating financial literacy into the curriculum can be challenging for teachers,” he says. But gamification, he suggests, offers a way to introduce financial concepts like insurance, budgeting, taxes, and pay checks in a relatable, real-life context.