Should schools teach financial literacy?
Ever wished you knew more about budgeting, super or taxation?
As a small business owner in the financial services industry this question now seems more important to me than in my younger years.
I have always been financially focused and started my first job at age 11 serving at a pool canteen after school. However, my financial priorities at that time were to have money to buy clothes and put credit on my mobile phone.
If someone had asked me which superfund I used or how it was invested I wouldn’t have known what they were talking about. When I think back to my school days we weren’t taught about superannuation, banking, mortgages, taxes or credit cards. We were taught how to identify money, how to count it, but nothing about managing it to advance our financial positions.
A 2019 survey by ME Bank found 40% of Australian adults wished they’d been taught more about money as a child (ME Bank survey shows the importance of learning about money as a child | Savings.com.au).
According to Spaceship’s Fear of Finding Out Survey over 60% of Australians admit they get anxious and stressed about their financial situation.
With such alarming statistics and the effect our finances have on our mental health – why are we not including more of this in the school curriculum and preparing young adults with some financial knowledge to set them up for the rest of their life?
A wise old man once told me that instead of buying a $4.00 daily coffee and contributed that money to my super fund, I could have an extra $268,000 in my super at retirement. This is something I wish I was told before I left school and commenced full-time working life!
The Australian Tax Office (ATO) believes important topics like tax and superannuation need to be covered more in schools.
“Since all Australians are required to pay tax and invest in super, it stands to reason that all school students should have the opportunity to learn about the taxation and superannuation systems, from the economic rationale underpinning their existence, to the practicalities associated with navigating them effectively, and how to access quality, trustworthy help when you need it,” a report commissioned by the ATO said.
In addition to super and taxation, other crucial financial areas that should be covered are:
· How bank accounts work (and how interest is earned) on savings accounts
· How credit works, and the danger of relying on it
· How a mortgage works
· How to compare financial products and the importance of doing so (fees, interest rates, hidden traps etc.)
· Creating wealth through investing
· How to create budgets and financial goals
· Strategies for earning incomes, and the cost of living
· Basic economics, and the role governments play in personal finances
To ensure young adults are entering adult life financially equipped could have a huge impact on their futures.
Catherine Attard, Associate Professor in Mathematics Education at Western Sydney University, states that “financial literacy in schools will help society in many ways. On an individual basis, our young people will leave school being able to make sound financial decisions relating to their personal finances”.
Touché! This statement speaks to my soul!
So, my challenge to you is – if you have children, nieces, nephews, or you care for young people, I urge you to start teaching some of these skills.
I have these conversations with my two boys almost weekly (normally when they don’t have money and they are asking to borrow to buy something!) and surprisingly they love learning about all things financial. We talk about mortgages, the cost of groceries, buying and selling house and cars, paying back loans even little things like the cost to have a mobile phone, to make calls and to have access to the internet! Go on, give it a go – I dare you!
Amy
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