The most recent Household, Income and Labour Dynamics in Australia (HILDA) survey of over 17,000 Australians, undertaken by the Melbourne Institute, revealed a concerning drop in financial literacy levels across all age groups, with the largest declines amongst 15–24-year-olds.
“Financial wellbeing is intrinsically linked to the overall physical, mental and social health of individuals and communities. However, improving outcomes across these domains is almost impossible to achieve if we don’t acknowledge and address the long-standing gaps in financial literacy and capability nationally,” Ms Caroline Stewart, CEO of the Ecstra Foundation.
“The latest HILDA report makes it clear that financial literacy is declining in Australia and this is a significant concern particularly at time when cost of living pressures are starting to hit home.”
The HILDA report provides conclusive evidence that no progress has been made on improving the financial literacy of the Australian population since 2016, and in fact it reveals that the country has gone backwards.
“While there are a range of consumer advocates, educators, community organisations, academics, and financial institutions engaged in financial capability work, the HILDA data, as well as other similar studies, are a stark reminder that without a holistic approach to financial education, there will continue to be a decline in financial literacy in Australia,” said Ms Stewart.
In Ecstra’s National Financial Education in Schools survey, 98 percent of parents and teachers agreed that financial education is important, but 68 percent of parents didn’t know if their child was not learning about it in schools, or assumed they were not receiving any financial education.
The Talk Money Program
Ecstra launched its Talk Money program in February 2022. The in-classroom workshops teach foundational money lessons for life, are interactive to encourage students to ask questions, discuss what they are learning and take those lessons home to share. The program is offered free to all schools for years 5-10.
The goal of Talk Money is to help Australian school students learn money lessons for life, to be confident talking about money and to make informed financial decisions. Over 110,000 students have participated in the program since launch in February 2022.
“Financial education plays a key role in building financial capability. Schools provide an important learning environment to teach practical money skills, but they also need to be supported with up-to-date resources, tools and incursion opportunities to teach it effectively,” said Ms Stewart.
Although the Australian school curriculum includes financial literacy – mostly through subjects such as maths, humanities, economics and business studies – Ms Stewart stresses that there isn’t a consistent approach to designing, teaching, supporting and measuring the effectiveness of financial education initiatives.
“Learning about money is a lifelong journey. School and community programs are a vital part of the solution, but not the whole solution. This is why we believe the Australian Government needs to step up and recommit to the National Financial Capability Strategy, which Treasury took over from ASIC in 2021. A lead agency could drive the strategy and outcomes including coordinating the efforts of the many organisations working to support consumers, and clearly communicate the benefits of a national approach working to build the future economic security and wellbeing of all Australians,” she concludes.
For more information, visit: https://talkmoney.org.au/
About Ecstra Foundation
Ecstra Foundation is an independent not for profit organisation committed to building the financial wellbeing of Australians, within a fair financial system. Ecstra works with other 80 partners across government, communities, academics and business. Ecstra funds a range of financial wellbeing and consumer care initiatives through an extensive grants program and has no commercial interests.
Ecstra partners with over 100 organisations including community groups, government, and consumer organisations as part of the National Financial Capability Strategy, led by the Australian Government.
For more information, visit: https://www.ecstra.org.au/
Further reading:
- Financial Literacy in Practice Challenge provides opportunities to strengthen and test students’ skills
- Teenagers need new money skills for post-COVID world: Financial Basics Foundation
