With Australia’s most significant student assessment now behind us, it got me thinking… are we teaching our kids enough about money management and, as a whole, are Australians lacking financial education?
I started investing in property in 1993 when I was only 18. At that time, I had no idea what I was doing, and I’m not ashamed to say I got lucky. But more importantly, during the process of buying my first investment property, I realised how uneducated I was when it came to money investing and finance. That experience sparked my interest in getting educated; the only problem was who could I go to?
There weren’t any companies like Wealthology; there were no blogs or websites. I had to surround myself with successful, like-minded people and learn the ropes from the start, which I did.
Fast forward over three decades, I’m fortunate to have been educated in finance and investing and have been able to secure my financial freedom as a result.
Recent Data Indications
Despite our team’s best efforts, recent data released indicated that only 25% of Australians surveyed could correctly answer basic questions relating to interest, savings, inflation and investing.
Interestingly, 40% of those same respondents wished they’d been taught more about property and finance as a child. Thinking back to my school days, I may have learned a lot of valuable things but trigonometry hasn’t really been helpful in life or my career.
I don’t recall the curriculum including anything related to superannuation, tax returns and deductions, comparing banking products or even mortgage payments and how to get the results financially for my future.
Most concerning is that financial illiteracy is getting worse.
The data obtained by our team indicated that only a quarter of people under the age of twenty-five are considered financially literate compared to fifty-five per cent of those approaching retirement age.
New Technology Exposes Young Australians to Financial Ruin
Such widespread financial illiteracy is of increasing concern with financial markets growing increasingly complex, high levels of personal and household debt and easy access to credit opportunities such as Wallet Wizard and Nimble.
Resorting to these kinds of services can be one of the worst possible decisions you can make when it comes to sound financial choices.
Technology exposes younger Australians to more complex financial decision making earlier than ever before. Services such as Afterpay and Zippay are extremely popular, and without the appropriate guidance and education, these platforms can easily lead to a slippery slope to financial ruin.
At a minimum, individuals need to understand the concept of compound interest.
Financial literacy correlates with various outcomes, including wealth accumulation and planning for retirement and superannuation savings. Essentially, the more you know about investing and finance, the more likely you are to be good at it. Sounds straightforward, right?
What Are We Doing About It?
As a nation, Australia has worked to improve financial literacy among younger people by including financial literacy as a sub-strand in the Math curriculum throughout primary and secondary education. In addition, The Australian Securities and Investments Commission (ASIC) introduced the MoneySmart Teaching program, which includes financial literacy for teachers. Unfortunately, it seems it doesn`t have the required effect.
You cannot rely on the education system to provide the platform for your children to learn about financial systems and how to invest.
It is up to YOU to educate yourself and pass down those core principles.
How Do You Help Your Kids?
We’re big fans of the book The Richest Man in Babylon by George S Clason. Countless readers have been helped by the famous Babylonian parable, hailed as the greatest of all inspirational works on the subject of thrift, financial planning, and personal wealth. And we love it.
It certainly is a must read for you if you’re wanting to change your current financial position or help your kids get ahead financially as it offers an understanding of – and solution to – your personal financial challenges that will guide you through a lifetime.
Babylon became the wealthiest city of the ancient world because its citizens were the richest people of their time. They appreciated the value of money. They practised sound financial principles in acquiring money, keeping money and making their money earn more money. They provided for themselves what we all desire… incomes for the future.
The Babylonians were incredibly switched on when it came to money. Unfortunately, today, few people know how to acquire wealth as most people lack the knowledge of how to keep any part of income earned.
Money Is Plentiful For Those Who Understand The Simple Rules of Acquisition.
Also, a budget is a very effective tool to help your kids on their financial journey. It will give them control over their money, keeps them focused on their money goals and helps them decide in advance how their money will work for them among other benefits. We’ve included a free budget template to use HERE.
I’m so passionate about educating Australians on wealth and executing this knowledge. Knowledge alone isn’t enough to improve someone’s financial health.
What’s important isn’t just the literacy, but what you can do with it and helping our kids do it better than previous generations is KEY to their success.
