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How we can improve the teaching of financial literacy in high school? And why is it important?<\/p>\n
People need a basic understanding of financial concepts to make good financial decisions.\u00a0Our newly released research<\/a>\u00a0found most students generally do not know a lot about personal finance. This includes being able to apply basic numeracy to real-life financial situations, such as making purchasing decisions that are value-for-money and understanding interest on loans and investments.<\/p>\n Our report also makes six recommendations to improve financial literacy education in schools.<\/p>\n Our findings were consistent with\u00a0previous evidence<\/a>\u00a0that 16% of Australian 15-year-olds lack even the basic level of financial literacy they need to participate in society. There is\u00a0evidence<\/a>\u00a0that financial literacy in this age group is declining.<\/p>\n This trend is concerning. The senior years of high school are a time when students take on more personal responsibility and financial independence. The\u00a0financial habits they form<\/a>\u00a0then may last through adulthood. Low financial literacy is persistently\u00a0linked to poorer financial outcomes<\/a>.<\/p>\n The\u00a0Australian Curriculum<\/a>\u00a0acknowledges students need financial literacy to operate in our financial world. However, this curriculum only covers up to year 10. In years 11 and 12, the years that are particularly important in shaping students\u2019 financial capability, financial literacy is taught only in lower-level maths subjects.<\/p>\n Our research<\/a>\u00a0explored the financial literacy of students in years 10, 11 and 12 at two urban and two rural schools. We found what students do know about financial literacy has been learned from home, maths or business studies. Students who were undertaking business studies were far more informed than other students.<\/p>\n Home life\u00a0has been found<\/a>\u00a0to have a huge impact on a child\u2019s financial literacy. There are often\u00a0calls for parents to teach their children about personal finance<\/a>. However, that assumes parents are able and willing to do that.<\/p>\n The students we spoke to were incredibly diverse. Household structures varied greatly, with many students not living with their parent\/s. There was also evidence of parents not being able to provide financial guidance.<\/p>\n Nearly half the surveyed students preferred not to think about their financial situation.<\/p>\n We talked to a lot of the students about maths and found this was not the most effective curriculum area for learning about personal finance. When taught as part of the maths curriculum it tends to result in students fixating on formulas and calculations, without understanding the underlying concepts. As one student said: Students who could remember financial concepts would often recall an experience or something from history when talking about it. This suggests stories may be more effective in communicating financial concepts. For example, one student said of inflation: About one in three students agreed they found managing their personal finances difficult and confusing.<\/p>\n Finally, we noted many students were not learning financial strategies, such as moderating spending, that have lifelong benefits.<\/p>\n Given the importance of financial literacy for student well-being, our report makes these recommendations:<\/p>\n![\"\"](\"https:\/\/world.edu\/wp-content\/uploads\/2022\/03\/PISA2018.png\")
<\/p>\nWhat did the study find?<\/strong><\/h4>\n
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\n\u201cI only really remember the formula because that\u2019s all we got taught.\u201d\/em>
\nMany students also dislike maths. This means they are disengaged from learning at the outset. One student told us:
\n\u201cIf I was in class doing that [a simple question about interest], I would just read it, keep reading it, but not actually process it or try it because I\u2019d just give up.\u201d\/em>
\nThere was also often a disconnect between the financial scenarios students were learning about and their experiences in their own lives.<\/em><\/em><\/p>\n
\n\u201cOver time, because obviously more money is being printed [\u2026] people think printing money creates more money and you\u2019re richer, when in reality you\u2019re just making the currency you have worthless, because there\u2019s so much of it, that it\u2019s not difficult to acquire it at all. I learned most of that from history.\u201d\/em>
\nInterestingly, we found evidence of young women in particular needing more context to make financial decisions. When asked financial questions, they wondered about different aspects of the question rather than quickly answering. Test questions commonly used to assess financial knowledge often offer little context.<\/em><\/p>\n![\"\"](\"https:\/\/world.edu\/wp-content\/uploads\/2022\/03\/DeZwaanWest2.png\")
<\/p>\nHow can we improve?<\/strong><\/h4>\n