New research shows that financial literacy should be introduced as a stand-alone high school subject to better prepare Australians for major financial shocks, such as the COVID-19 shutdown.
A paper by Queensland University of Technology (QUT) academics Ryan Menner and Chrisann Lee, commissioned by the Financial Basics Foundation, highlights the need for teenagers to have a formal financial education.
Mr Menner said the earlier children were taught about earning, spending, saving and investing, the better they were able to handle their finances as an adult.
“Young people under 25 often lack financial experience, education and income, which can make them particularly vulnerable to financial hardship,” Mr Menner said.
“Financial literacy is covered in parts of the Australian curriculum but it’s optional and usually included as part of economics or business classes. It needs to be a stand-alone subject.”
Mr Menner said at least 14 states in the US had moved to compulsory financial education in the senior school curriculum.
With so many families spending time at home during the COVID-19 pandemic, the Financial Basics Foundation and Suncorp have launched the Financial Rules of Thumb, a free online resource kit to help parents talk to their children about money.
Foundation Chair Brigid Leishman said Australian children deserved every chance to learn the fundamentals of money and the new online resource would help.
“As communities feel the shocking effects of COVID-19, hundreds of thousands of young people have lost their jobs, families are being forced to prioritise their spending on essentials – it’s a very tough lesson,” Ms Leishman said.
Suncorp Bank CEO Lee Hatton said the aim of launching the Financial Rules of Thumb kit was to equip young people with the right education to take charge of their financial future.
“Australian teenagers are tech savvy, so we’re bringing learning to life through digital to give them hands-on experience in budgeting, investing or paying bills,” Ms Hatton said.
“Educating children about the financial basics helps build their confidence, so that they can navigate opportunities and challenges ahead.”
See the Financial Rules of Thumb online kit here: suncorp.com.au/learn-about/finance-for-kids
THE FIVE FINANCIAL RULES OF THUMB
PAY YOURSELF FIRST – always put aside a portion of your money for savings.
SPEND LESS THAN YOU EARN – make a budget, so you know exactly what you can afford.
SHOP AROUND – compare and shop around, you might find it cheaper.
TIME IS MONEY – the longer you save the more interest you can make.
SLEEP ON IT – don’t rush into big purchases, take time to think it through.
ABOUT FINANCIAL BASICS FOUNDATION
Launched in 2002, the Foundation is an independent, non-profit organisation providing free financial literacy resources to secondary schools across Australia. Its mission is to enhance the financial capability of young Australians.