Despite the integration of financial literacy into the mathematics curriculum and other school-based initiatives, student outcomes in this critical area are on the decline.
This has been highlighted through a comprehensive set of questions designed for 15-year-olds in the OECD’s PISA assessment, which reflects the deterioration in financial knowledge and decision-making skills, indicating inadequate preparedness for managing personal finances and avoiding scams among young individuals.
The financial literacy module in the 2012 and 2018 cycles demonstrated a 15-point decline and Australia did not participate in the most recent PISA financial literacy testing. Worryingly, less than half of all disadvantaged students achieved the national proficiency standard, compared to 80% of most advantaged students.
One organisation that is pulling out all the stops to address this issue is Ecstra, whose Talk Money program is seeing some impressive results in classrooms around Australia.
According to Ecstra Foundation’s annual Financial Education in Schools Impact Reports, the program has made “an immediate and positive impact on the financial literacy, knowledge and confidence of more than 100,000 school students across Australia.
Below, The Educator speaks to Dr Tracey West, Financial Education Manager at Ecstra Foundation, about how the company is helping young people take charge of their financial future.
TE: Can you talk us through the specific challenges students face today that make financial education more crucial than ever, beyond the general complexities of personal finance?
Financial education is increasingly crucial for students today due to several pressing challenges beyond the general complexities of personal finance. The decline in financial literacy is alarming considering the financial challenges young people will face in adulthood, such as rising living costs, complex financial systems, economic disparities, and heightened scam risks.
Early adulthood is a critical period for shaping financial habits, which tend to persist over time. Research indicates that low financial literacy correlates with poor economic outcomes later in life, including debt and financial difficulties. Socio-economic disparities affect financial literacy levels, making education essential for bridging these gaps. Many Australians, especially young people and women, find managing money stressful, with financial issues often exacerbating mental health challenges. Recognising the link between financial well-being and mental health underscores the importance of comprehensive financial education in fostering overall resilience and success.
TE: Given the current landscape of professional development for teachers in the area of financial literacy, how do you believe these programs need to evolve to better support Australian teachers in integrating financial education into their curricula effectively and confidently?
Professional development programs for teachers in financial literacy need to evolve to better support Australian educators in integrating this vital aspect into their curricula confidently and effectively. Addressing teachers' challenges in incorporating financial education amidst a crowded curriculum is crucial. Providing schools and educators access to evidence-based, curriculum-aligned workshops, resources, and tools is essential for facilitating impactful learning in classrooms and at home. Embracing recommendations like creating a common bank of high-quality, commercial-free resources, as suggested by the Productivity Commission, would greatly assist teachers. This resource bank should include proven programs such as Talk Money, government initiatives like MoneySmart teaching resources and the ATO's Tax, Super + You program.
TE: I understand the Financial Literacy in Action Awards have been set for Global Money Week 2024 – an exciting development! How do you envision these Awards will specifically address the important dual objectives of improving teacher motivation in financial education and improving students' financial literacy skills?
The Financial Literacy in Action Awards celebrate teachers who are engaging their students through financial education and enhancing students' financial literacy skills. Initiated by Talk Money with Ecstra Foundation, the invite submissions from K-12 Australian educators who inspire confidence in their students' money management abilities. Four awards totalling $10,000 will be on offer.
These awards recognise teachers' dedication and creativity in delivering financial literacy content while encouraging schools and educators to prioritise financial education. By acknowledging educators' contributions and encouraging more money lessons in the classroom, Ecstra aims to foster a ripple effect within school communities, and ultimately empower students to navigate financial decision making and thrive in the future.
Teachers can enter the awards here and also register their school for Talk Money here.
TE: Moving into 2024 and beyond, how will Ecstra Foundation be building on the successes it has seen through its existing initiatives in Australian schools?
Moving forward into 2024 and beyond, Ecstra Foundation aims to build upon the successes of its existing initiatives in Australian schools by advocating for a more coordinated, cross-sector approach to financial education. While Ecstra's Talk Money program has made strides in addressing the financial education gap, there's a recognition that national leadership is essential to ensure every student has access to adequate, independent financial education. This includes supporting teachers and schools with evidence-based, curriculum-aligned resources, workshops, and tools to facilitate the delivery of financial education in classrooms. Ecstra Foundation envisions a fairer education system that prioritises financial education and wellbeing as a core, compulsory aspect of curriculum knowledge and pastoral care, enhancing students' long-term economic and social well-being.