Young Australians want and need more financial education

With the average person typically seeking out financial knowledge only after they’ve had a poor experience, it’s crucial to ensure a solid financial base from a young age, according to this Griffith academic. 

Dr Laura de Zwaan of Griffith Business School, co-author of the Financial Literacy of Young Australians report in 2022, explained that financial literacy courses were an important first step in manoeuvring the country’s financial system. 

“Being financially capable, that’s the phrase we use, means to be able to navigate the system, make decisions, and not be disadvantaged by it,” she told Money Management. 

“But we do have particular groups that are at a disadvantage, like older Australians, but also young people. They aren’t faring well at all, unlike middle-aged people who are making financial decisions and experiencing the system all the time”.

Her research, which focused on high school students aged 14 to 18, found they were aware of financial concepts such as interest, inflation, and superannuation but had little to no understanding of personal finance.

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“Financial literacy is part of the Australian curriculum, and teachers do an amazing job, but it could definitely be improved,” Dr de Zwaan said. 

“One of the big things that came out of my research and the young people I've talked to, is they want more of it. They’re aware that they don't know these things.” 

She identified that, while financial concepts were being embedded into the curriculum, real-world context was vital to help students connect the dots. 

“When we went into high schools and asked the kids to tell us about math projects or anything that teaches them about finance, they really don’t make the connection between ‘This is an assignment in math that’s getting me to compare petrol prices,’ and how that’s teaching them a life skill. They don’t always notice that it’s being taught to them. 

“Also, a lot of it is irrelevant [to them] until they start earning their own money. The curriculum goes up to Year 10 when a lot of them start working in Year 9 or 10, and making a bit of money in Year 11 and 12.”

According to Dr De Zwaan, a lecturer and researcher in finance and financial planning, learning about money matters is a lifelong journey. 

“It’s appropriate to teach kids at all ages about money, but it’s about what you’re teaching them. They do a great job in primary school, getting them to identify different coins, talking to them about prices and things like that. 

“The real issue is in Year 11 and 12. They’re the students who go, ‘Oh, I’m about to finish school, get a job, and don’t know how to do my taxes’. They panic and worry about that. They’re also the ones with little time because they’re studying and working, so it’s difficult to actually help at that age.”

She advocated for personal finance courses at a university level that could help young Australians, such as the University of Western Australia’s elective Managing your Personal Finance course, which explored financial product selection, retirement savings decisions, debt and investing, and other relevant topics.

“It can be a bit of a hard sell; I’ve tried to put it up to universities. It’s not something they’re particularly interested in, but students do tend to take those subjects [if offered],” she said. 

Ultimately, a lot of people struggled to navigate the financial system on their own without the help of courses and additional knowledge sources. 

“It’s not on them; it’s just the complexity of our systems. I teach superannuation; we do a whole course on just super, and even that’s crazy complicated. 

“If we could simplify the system, that would be great. But until that happens, having access to advice, as in people with knowledge who could answer your questions, is important. That’s a form of literacy in itself — understanding your limits, seeking out help, understanding the advice, and then implementing it.”