The Importance of Teaching Financial Literacy to Youth
The Importance of Teaching Financial Literacy to Youth
0
The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.
During a recent outreach program at Penrhos College, Wealth Designers senior financial adviser Dawn Thomas asked a group of Year 9 students about the cohort with the least amount of superannuation.
To their surprise, the answer was not what they expected.
"Being kids, they threw out the most imaginative answer, which I've never heard before," Thomas tells Professional Planner. "They said babies."
While technically not incorrect, the correct answer is women.
"I explained that women retire with half the amount of superannuation that men do," Thomas says. "They were shocked and I asked them if they thought that was fair. They replied with a resounding 'No!'"
This presentation by Thomas and Horizon Group of Companies financial advisers Remo Venditti is part of a program aimed at teaching high school students about budgeting, financial goals, compounding, investing, and superannuation.
Addressing the Financial Literacy Gap
The Financial Advisers Association of Australia (FAAA) recognizes the importance of educating young people about financial literacy, according to FAAA general manager Anne Palmer.
"Teaching financial literacy to young people is incredibly important," says Palmer. "It sets them up for success in the future, not just financially but in every aspect of life. The foundation of any financial plan is understanding cash flow and budgeting."
Thomas agrees, emphasizing that even children can benefit from understanding their cash flow and budget. Starting the practice of saving for things instead of relying on debt at an early age is key.
"If they understand the benefits of long-term investing, it's really the world's their oyster," Thomas says. "Young people right now can give themselves a good start by equipping themselves with the tools to save and invest wisely."
The Talk Money Program
In response to the decline in youth financial literacy, Ecstra launched the Talk Money program in 2022, aimed at teaching children about financial literacy. Since its inception, the program has reached over 230,000 students through workshops conducted in schools across Australia.
Roadshows make up 17% of Talk Money bookings, allowing for concentrated time in regional areas across the country. While online workshops are available, the organization prefers face-to-face interactions for better student engagement.
About 24% of bookings in 2023 were repeat bookings, indicating the value that schools see in financial literacy education. External facilitators like Ecstra provide teachers with the confidence to have conversations about money in the classroom.
Ecstra is actively reviewing and improving the Talk Money program based on feedback received from schools and students, showing their commitment to evolving and meeting the needs of young learners.
Emphasizing Financial Literacy as a Life Skill
Anne Palmer and Tracey West, manager of the Ecstra Foundation, both believe that teaching financial literacy is a crucial life skill.
"It's one of the most important subjects young people will ever learn," says Palmer. "It sets them up for success not just financially, but also in all aspects of life."
West adds, "Financial literacy is a key skill that empowers individuals to make informed decisions about their finances and future."
By teaching young people about budgeting, saving, and investing, we equip them with the knowledge and tools to build a more secure and prosperous future.
Published:Friday, 17th Nov 2023 Source: Paige Estritori
Please Note: If this information affects you, seek advice from a licensed professional.
National Australia Bank (NAB) has taken a significant step in its digital transformation journey by integrating Google Cloud into its existing multi-cloud strategy. This move aims to bolster the bank's digital services and enhance operational efficiency, reflecting a broader trend among financial institutions to leverage cloud technologies for improved service delivery. - read more
The Mortgage & Finance Association of Australia (MFAA) has released the final two guides in its Business Growth Roundtable Series Insights, aimed at assisting mortgage brokers in developing sustainable and professional businesses. These resources are part of the MFAA's ongoing commitment to supporting the growth and professionalism of the mortgage broking industry. - read more
As 2026 approaches, Australia's major banks have released forecasts indicating potential interest rate hikes, sparking concerns about a renewed cost of living crisis. The 'big four' banks-Commonwealth Bank, National Australia Bank (NAB), Westpac, and ANZ-have dismissed the likelihood of rate cuts in the coming year, with some predicting increases as early as February. - read more
When you embark on the journey of securing a loan, one pivotal factor that looms large in the eyes of lenders is your debt-to-income ratio, commonly known as DTI. This crucial metric measures the chunk of your monthly income that goes towards paying debts, and it serves as a barometer for financial stability. A lower DTI can swing the doors wide open to favorable loan terms, while a higher one might signal red flags for potential lenders. - read more
As a personal loan seeker in Australia, understanding interest rates is crucial. Interest rates significantly impact the overall cost of your loan and your monthly repayments. Being well-informed ensures that you make the best financial decision for your situation. - read more
Applying for a loan online streamlines the traditional borrowing process, offering a convenient and fast route to financial assistance. With the advent of technology, borrowers can now complete the entire loan application process from the comfort of their own homes. This digital evolution brings with it a series of steps that, when executed correctly, can result in swift loan approvals. - read more
