Major shift needed for teaching financial literacy
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While you're reading this I'll be in Africa at the Holding Hands Children's Home, up to my elbows in paint, mud and children's laughter.
As preparations begin for departure, I've been thinking a lot about people's needs, speculating about how different or otherwise the needs of the children I meet in Kenya will be to the needs of my own children back home.
It will be fascinating, in between cuddles, to study how the children's grasp of the raw concepts of barter, negotiation, and security is developing, since these concepts are financial literacy fundamentals and form the basis of any financial system.
The importance of children's financial literacy is gaining traction in Australia too. ASIC has invested $10 million of federal government money into the MoneySmart Teaching schools programs with the aim of raising levels of financial literacy for children, using schools as the distribution pipeline.
It is my fervent hope that the MoneySmart Teaching programs will be within the reach and means of the most disadvantaged schools in Australia, since this is arguably where a significant raising of the financial literacy benchmark is most needed in order to better the living standards of people with far less access to opportunities than you or I. I also hope that politics and elitism vacate themselves from the initiative; they have no place here.
Consider the economic benefit of more women and young people entering the workforce with an appetite for trade and barter, equipped with a vision of how their lives can be improved beyond the imaginings of the previous generation and with a pathway to follow.
Consider too, how without a grounding in financial literacy, those same young people may otherwise become dependent on the state for support. Clearly my hypothesis is one which scratches at the surface, since there are many dimensions to self-improvement and the long hard journey from disadvantage, as any philanthropist will tell you.
Anecdotally, there is an extraordinarily high proportion of women in particular who lament their lack of financial education. If this troubling phenomenon is to change we need to see a generational shift in the approach to teaching money concepts both in the home and in schools. Since it is apparent that a high proportion of our adult population lacks financial literacy themselves, how can we expect them to teach their own children?
Logic suggests that we're reliant on the schools and the politics behind their management to implement sustainable change, although the philanthropy sector is starting to achieve some amazing outcomes as well through place-based initiatives that go right to the heart of the need.
It remains to be seen how things will play out over the coming years and how the success indicators report the results. Meanwhile, I'd love to hear your views on financial education: did you get one, what did you learn, how are your confidence levels with money and what are you doing about it.
Sara Lucas is an Authorised Representative of Fitzpatricks Dealer Group Pty Limited ABN 33 093 667 595 AFSL 247429
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