A financial planner has backed the corporate regulator's suggestion to instil financial literacy into the school education system, saying it has been hard to educate her adult clients, let alone train them to pass financial literacy skills onto their children.
FMS Group's Christine Hornery welcomed comments made by the Australian Securities and Investments Commission (ASIC) Chairman Greg Medcraft in a speech to the Australian Bankers' Association last week that financial literacy for children is a must.
"Some people do not seem to understand that credit cards are loans on which they pay very high interest," she said.
"These people feel that the cash available on their credit cards is their own money to spend as they like. If this is any indication of the type of lessons parents are teaching their children, then we have a serious issue coming our way in terms of debt."
Hornery added the school system does not seem to focus on teaching practical financial responsibilities that individuals have throughout their lives.
She added that children need to learn about budgeting and planning from a young age.
"Financial literacy isn't about the theory, it's about the practical — the information children will learn that will actually give them the knowledge and resources to make astute decisions around credit cards, car loans, home loans and budgeting."
In his speech to the ABA, Medcraft said that under ASIC's 2014—17 National Financial Literacy Strategy, the goal is to train a minimum of 20,000 additional teachers with the aim of teaching financial literacy from kindergarten to year 12 in all 10,000 Australian schools.
