December 16, 2021

The Challenges of Teaching Financial Literacy

There's an important reason why only 55% of Australians are financially literate: teaching kids about money is really hard!!

 

Financial Literacy in Australia

 

Australia is in the midst of a financial literacy crisis. In fact, only about 55% of us have a basic grasp of financial skills and knowledge, which unfortunately translates into poor financial decisions in adulthood.

 

75% of Australians believe that the education system “isn’t doing enough to equip students with the financial skills they need as an adult”. If we are going to change Australian’s attitude towards money, it’s important to understand why it exists.

 

As financial educators ourselves, we recognise that a key issue lies with how difficult it is to teach financial literacy. As a result, many schools are hesitant to teach money and determine the responsibility resides with the parents to teach it at home. Thus, the problem continues.

 

Why is Teaching Financial LiteracyHard?

  

This is ultimately the other big question. Many of us struggle to teach financial literacy and there is a plethora of reasons why.

 

Lack of Confidence

One of the most prevalent reasons that people struggle to teach financial literacy is alack of confidence. If you consider the statistic previously mentioned that only 55% of us understand our personal finances, it's fair to assume that many teachers themselves aren't specialists when it comes to finance. Indeed, according to The Global Financial Literacy Excellence Centre, only 57% of teachers stated they would be confident educating students in financial decision making.

 

Notably, 48% of these teachers believe that with training and resources, they too would feel confident teaching finance. So, there is clearly an education gap that lies not only with students, but with teachers as well.

 

Exclusion from the Curriculum

 

Another key problem behind teaching financial literacy is the lack of driving force given its exclusion from the Australian Curriculum. While it is possible to find a few references to fundamental financial concepts in the curriculum, they are few and far between with the majority being covered in humanities and math subjects. Financial literacy deserves its own dedicated subject to effectively and uniformly give students the skills to tackle adult life.

 

Consequently, only 65% of teachers who don't teach subjects covering finance, would be motivated to teach these concepts. Therefore, it's critical that we find ways to show teachers how these concepts can fit into their subjects (if you’re curious, we’ve written a few handy recommendations on finding departments financial literacy fits into).

 

Preconceptions

 

Many teachers have plenty of preconceptions when it comes to teaching financial literacy. A lot assume that it's boring or that their students won’t find it engaging. Therefore, it’s important that teachers are given ways to deliver these important concepts in ways that complement their teaching flow.

 

Onus on the Parents

 

The other issue when it comes to financial literacy is that it's unclear where the responsibility lies to teach it. Many schools operate under the assumption that parents are teaching their kids these concepts. However, only ¼ of students feel as though their parents adequately taught them financial literacy with ¼ also stating they received no financial education at all.

 

Therefore, it is necessary that we clearly define the role educators play in teaching financial literacy or else many students will be left in the dark when it comes to these life skills.

 

 

How do we overcome the barriers to teaching financial literacy?

 

Firstly, financial literacy isn’t rocket science. Realising that personal money management isn’t as complicated as is believed will help give educators confidence in teaching their students. Teacher resources that help break financial concepts into easily digestible pieces of information can help reduce the reservations about teaching money organisation. Additionally, having schools organise seminars for teachers to be up-skilled can help to overcome the confidence gap in teaching financial literacy.

 

Secondly, make finance interesting. Super & Tax don’t have to be boring (yes, you read that right!). Engage students with colourful content, unique activities, and examples they can relate to.

 

Finally, to make a tangible difference, financial literacy deserves its own dedicated subject in the curriculum. Everyone deals with money to some extent as an adult; therefore, financial literacy should be a compulsory subject to help students navigate adult life.

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