Financial literacy program bridging persistent gap in schools

Financial literacy program bridging persistent gap in schools

The OECD’s 2018 PISA assessment revealed a concerning trend when looking at the financial literacy of young Australians.

The number of students below the baseline proficiency level increased by 20% compared to 2012, meaning more students had difficulty identifying the consequences of recurring transaction costs and fees on budgets.

For example, they would buy an item before they had enough money, and found utilising simple numerical operations to solve problems in financial literacy contexts a challenge.

Worryingly, student responses showed that they would reply to scam emails, provide their ‘lost’ online banking details or click on a link provided within an email and follow the instructions instead of contacting their bank.

In February 2022, Ecstra Foundation launched the Talk Money program to ensure that Australian school students “learn money lessons for life, be confident when talking about money, and make informed financial decisions.”

Since its launch, the program has reached 262,171 students across 7,000 workshops in 1,125 schools, significantly improving the financial literacy of young people across Australia.

Through survey feedback after the workshops, 90% of teachers said their students’ money knowledge had improved and 82% of teachers observed an increase in students’ confidence to manage money. Motivation to achieve financial goals increased and teachers credit the program for covering topics that would not otherwise have been taught in the classroom.

Early intervention is critical

Dr Tracey West, Ecstra’s financial education manager said the financial literacy of young adults is particularly critical as financial habits formed in early adulthood are likely to persist, and financial behaviour has been shown to have a major impact on financial wellbeing.

“Studies have established a correlation between low financial literacy and poor financial outcomes later in life, and data shows that money attitudes and unsound financial management practices are predictors of debt and financial problems amongst young Australians,” West told The Educator.

“The Talk Money program recognises that developing good financial skills in young people is critical for their financial wellbeing in adulthood. This program successfully builds the confidence of young people to have age-appropriate money conversations.”

In primary school, the company’s workshops focus on how to manage a conversation with a friend who is insistent on spending money earmarked for a gift. Students are taught to use an active listening framework and respectfully disagree with their friend if they need to.

The program’s high school workshops introduce a strategy to equip students to make spending decisions that align with their values and take a breather when needed to reevaluate the situation. In upper high school, the context shifts to supporting conversations in the workplace to assert their rights.

“In all workshops, we reinforce that the ability to say ‘no’ is a key skill that supports long-term financial outcomes,” West said.

“Previous generations have avoided talking about money and labelled it a taboo subject. We are helping to break down these beliefs so that the next generation can ask for help when they need it, particularly when making decisions that are new to them.”

West said 80% of students report feeling more confident about discussing money following the workshops.

“Importantly, students tell us they have learnt that it is acceptable to decline spending when faced with pressure from others,” she said.

“As our young people face ever-increasing influences on spending and easy access to credit, having the confidence to ask questions and to take the time to think about decisions will set them up with good money management skills for life.”