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Teaching Financial Literacy in Schools

By December 6th, 2023No Comments
Teaching Financial Literacy in Schools

The Importance of Money Education

Financial literacy is an essential life skill that enables people to make wise financial decisions and successfully negotiate the complicated world of money management. Unfortunately, a lot of young people leave school without having a firm grasp of personal finance.

According to a 2022 Financial Review article, Australians’ financial literacy deteriorated between 2016 and 2020. This was seen in a survey done by the Income and Labour Dynamics in Australia (HILDA), which asked members of 17,000 households five questions designed to evaluate financial literacy between 2016 and 2020.

Age Group 2016 Average Score (out of 5) 2020 Average Score (out of 5)
15-24 3.4 2.9
25-34 3.9 3.6
45-64 4.2 combined 4.1


  • Men’s average scores across all age groups decreased from 4.1 out of 5 in 2016 to 4.0 out of 5 in 2020.
  • Australian women’s average scores decreased from 3.7 to 3.5.

Roger Wilkins, the deputy director of the HILDA survey, pointed out that the decrease is in line with a decline in the number of Australian high school students majoring in economics. In the three years leading up to 2020, the Reserve Bank of Australia (RBA) discovered a “dramatic” 70% fall in Year 12 Economics enrollments.

The Case for Teaching Financial Literacy in Schools

The changing financial landscape and complexity of modern life make teaching financial literacy in schools all the more important. Introducing financial literacy education at an early age fosters long-term financial well-being by exposing students to financial concepts and skills, promoting good spending habits and behaviours, and instilling the importance of saving, budgeting, and informed choices. Early financial education also helps students understand the value of long-term goals, such as homeownership and retirement planning and empowers them to make decisions that align with those goals.

In Australia, various sources provide valuable insights and resources for teaching financial literacy in schools, such as the Australian Securities and Investments Commission (ASIC) offering the MoneySmart Teaching Program and the Australian Curriculum including elements of financial literacy education across different subject areas. By recognising the changing financial landscape, understanding the consequences of financial illiteracy, and appreciating the benefits of early financial education, we can make a strong case for incorporating valuable financial lessons into the school curriculum.

Integrating Financial Education into the School Curriculum

To determine when and how to introduce financial education, it is important to consider the student’s age, cognitive abilities, and developmental stage. Gradually introducing financial concepts at appropriate grade levels allows students to build upon their knowledge over time. The Australian Curriculum offers guidance on integrating financial literacy into subjects such as Mathematics, Humanities and Social Sciences, and Economics and Business.

Strategies for integrating financial concepts across subjects involve collaboration between teachers and finding opportunities to connect real-world financial scenarios with subject-specific content. For example, in Mathematics classes, students can learn about budgeting, interest rates, and financial calculations. In Humanities and Social Sciences, they can explore economic systems, consumer rights, and the impact of financial decisions on individuals and society. By making these connections, schools can emphasise the importance of financial knowledge and encourage students to apply their learning in meaningful ways.

Teaching Financial Literacy

Essential Financial Concepts for Students

Understanding essential financial concepts is crucial for students in Australia to develop good money management skills and make informed financial decisions.

Here are some key concepts that students should focus on:

  • Budgeting and Money Management Skills: It is essential to teach students how to make and keep a budget. Students should also learn how to keep track of their earnings, expenses, and financial goals. A budgeting tool can assist students in setting spending priorities, preventing overspending, and developing good financial practices.
  • Value of Saving and Investing: Students should understand the importance of saving money and the benefits of long-term investing. They can learn about different savings options such as regular savings accounts, term deposits, and managed funds. Encouraging them to set financial goals and save regularly fosters financial discipline. It is also essential to introduce them to basic investing concepts, such as the stock market and compound interest, to help them grow their wealth over time.
  • Credit, Debt, and Responsible Borrowing: Building knowledge about credit, debt, and responsible borrowing is important to prevent financial pitfalls. Students should understand the concept of credit, the importance of maintaining a good credit score, and the potential risks associated with excessive debt. Teaching them about responsible borrowing, including the responsible use of credit cards and loans, can help prevent financial stress in the future.
  • Basics of Banking, Checking Accounts, and Financial Institutions: Familiarising students with banking services, checking accounts, and different financial institutions is important. They should understand how to open and manage a bank account, perform transactions, and use banking services effectively.

Strategies and Approaches

Teaching financial literacy effectively requires employing various strategies and approaches to engage students and provide them with practical knowledge and skills.

Here are some effective strategies and approaches for teaching financial literacy:

  • Active learning methods: When it comes to teaching financial literacy, active learning techniques like simulations, games, role-playing, and hands-on activities are quite helpful. These approaches promote student engagement, critical thinking, and problem-solving abilities. For instance, students can participate in a budgeting simulation where they control their spending and make financial decisions in a model of the actual world.
  • Integrating technology and online resources: In today’s digital age, incorporating technology and online resources has become essential for improving financial literacy teaching. Students can study and practise financial skills on exciting and accessible platforms thanks to interactive online tools, educational websites, and mobile applications. These resources may include interactive financial concepts tutorials, investment simulators, and budgeting apps.
  • Collaborating with financial institutions and community partners: Collaboration with local businesses, community organisations, and financial institutions can improve financial literacy instruction. Guest speakers can share their knowledge with students, offering advice and guidance from their own experiences.

Parental Involvement and Reinforcement

Parental involvement and reinforcement are crucial factors in promoting the effectiveness of financial education and ensuring that students develop strong financial literacy skills.

Here are some ways to encourage parental involvement and reinforcement in financial education:

  • Engaging parents in supporting financial education at home: Educators can actively engage parents by giving resources, information, and assistance on how to support financial education at home. This may be advising on how to bring up money issues with kids, establishing savings targets as a family, and including kids in household financial decisions.
  • Promoting open communication about money matters within families: A helpful environment for learning can be created in families by promoting candid and open discussions about money. Parents may assist children have a better knowledge of financial concepts and decision-making by sharing their personal experiences, difficulties, and accomplishments with money.
  • Encouraging families to reinforce financial concepts and practices outside of school: Teachers can give parents useful suggestions and exercises to help them reinforce financial concepts outside of the classroom. This can involve motivating kids to keep track of their spending, save aside money for a specific purpose, shop around for the best deals, or take part in family budgeting conversations.


Financial literacy plays an important role in empowering students with the necessary skills and knowledge to make informed financial decisions and achieve their long-term goals. Effective financial education involves incorporating active learning methods, integrating technology and online resources, and collaborating with financial institutions and community partners. Additionally, parental involvement and reinforcement are essential in creating a supportive learning environment and reinforcing financial concepts at home.

In today’s complex financial landscape, individuals are faced with numerous financial choices and challenges. By learning about topics such as credit, loans, taxes, and insurance, students are better equipped to navigate these complexities and avoid potential financial pitfalls.

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