Shortfalls in Financial Literacy Common, Worse in Young Women

You’ve got the degree, you then got a career, a family and a house maybe, there’s a wage or two coming in but still there never seems to be enough money.

Many will find themselves in the position of being permanently cash strapped, and it affects everything, relationships, well-being, life experience…

What’s missing is financial literacy, it has been introduced into the curriculum but without it being front and centre, critical knowledge is failing to get through.

“The ACARA Consumer and Financial Literacy Curriculum Connections (CFLCC) and the National Consumer and Financial Literacy Framework (NCFLF) are not being addressed in a consistent or systematic way by all schools across Australia,” says Katrina Samios, CEO and Director of the Financial Basics Foundation.

“There are hot-spots of excellence and best practice, however no nationwide program of delivery exists to allow schools to explicitly target financial and consumer literacy standards. Financial Basics Foundation is calling for a curriculum-based program which enables teachers to deliver comprehensive, stand-alone personal finance education in Australian secondary schools delivered as a life skill topic, rather than a specialist subject. Financial capability and wellbeing are an essential life skill, rather than a component of a specific subject area,” she says.

For many students, maths is not the most effective curriculum area for learning about personal finance. Maths tends to result in students fixating on formulas and calculations without understanding the underlying concepts. Many students also dislike maths, resulting in more disengagement. Higher level maths doesn’t cover ‘everyday’ personal finance and money. This means that a really important life skill is being embedded in maths, where many students are already disengaged.

“Stories are important for learning. In a study, students could recall financial concepts by recalling an experience or story they had heard or movie they had watched e.g. the concept of shares from watching the Wolf of Wall Street.

“Also, context and relevance are really important. It is important to match the learning activities with what the students are experiencing and to use real life scenarios. Age is a really important consideration for context. For example, many year 7 students may have little experience with money, but by year 10 or 11, many students will have their first job, so talking about budgeting, back accounts, and tax make sense and is relevant. However, this is often when there is less time in the timetable to cover these concepts,” Samios says.

In order to effectively teach financial literacy teachers need to continuously enhance their own knowledge and skills in this area. This may involve attending professional development workshops, engaging in self-study, and collaborating with experts in the field. In addition to enhancing their own knowledge and skills, teachers should also be aware of and recognise suitable financial literacy teaching resources that are relevant to the Australian context.

“By utilising these resources, teachers can provide students with comprehensive and engaging learning experiences. Trusted websites, such as government departments and organisations, like Financial Basics Foundation, provide tools, guides, and downloadable resources to support the teaching of consumer and financial literacy. By being aware of and utilising these resources, teachers can enhance their own understanding of financial literacy and effectively deliver engaging lessons that meet the needs of their students.”

A fundamental piece of advice that Samios attempts to impart to young people is to know where the money goes.

“Develop a habit of budgeting and tracking your expenses. Budgeting allows you to understand your income, expenses, and financial goals, helping you make informed decisions about spending and saving. By creating a budget, you can allocate your income towards essential expenses, savings, and discretionary spending.

“Tracking your expenses helps you identify areas where you may be overspending and allows you to make adjustments to stay within your budget. By practicing budgeting and expense tracking from a young age, you can develop good financial habits that will serve you well throughout your life. It will enable you to make informed financial decisions, save for future goals, and achieve financial stability.”

A recent study showed no gender specific differences in the financial knowledge of boys and girls, however there was a perceived lack of confidence for some girls, particularly when they were in focus groups with boys present.

It is important to ensure that financial education programs are inclusive, relevant, and tailored to the needs and experiences of young women, by addressing topics that are relatable and providing real-world examples that resonate.

Young women particularly seem to be less financially able and that can be attributed to confidence and the context in which financial literacy is taught. This lack of confidence may lead to a lower level of engagement and participation in financial education programs.

When girls are given the chance to discuss the financial concepts and reflect or what they know, girls are just as knowledgeable as boys.

“Girls seem to require more context so, rather than taking some of the financial literacy questions on face value, they sought a deeper understanding. Often overthinking the question. Therefore, more description or context in questions could make it clearer for girls.

“By addressing confidence and ensuring that financial literacy education is relevant and inclusive, we can bridge the gender gap in financial knowledge and empower young women to make informed financial decisions for their future.”

Katrina Samios and the Financial Basics Foundation are helping to deliver the Suncorp Bank ESSI Money Challenge which launches in August.
Participants compete for a chance to win prize money for themselves and their school from a total pool of over $11,000. Teachers can register their classes for the Suncorp Bank ESSI Money Challenge starting 29 July.