Shaking up the traditional image of finance and economics at school could be the key to creating financial literacy among the next generation, writes CHARLOTTE BARKLA.
According to the latest OECD Programme for International Student Assessment (PISA) Financial Literacy survey, 61% of Australian students aged 15 years hold a credit or debit card; 68% have an account with a bank, building society or credit union; and 55% have a mobile app to access their bank account – the highest of all countries surveyed. In our increasingly cashless society, where it seems a new ‘buy now, pay later’ option pops up every second day, financial literacy has never been more important.
“The Victorian government’s recent ban on school banking programs paves the way for quality, school-led programs free from commercial interests,” says Dr Carly Sawatzki, mathematics lecturer at Deakin University. “As we emerge from the coronavirus recession, there is significant potential for new thinking about the teaching of financial capability in schools.”
Carly says that one approach to real world, practical finance education is through co-designing programs within school communities, enabling buy-in from parents and the wider community.
“While there are often common learning needs and interests, the economic and financial issues that matter locally can vary from setting to setting. Schools have the flexibility to co-design teaching and learning with parents and students.”
Jasmine O’Brien, Numeracy Learning Specialist and teacher at Portarlington Primary School, has done just that. Working with a group of Year 3 to 6 students, Jasmine has developed a financial literacy project that simulates a small business, involving students in the making and selling of soaps.
“Each week we meet to set goals, discuss the business outcomes, and reflect on key business milestones,” says Jasmine. “Today we had a class on finding the average price and weight of soap at supermarkets and other businesses, to give us some baseline figures. Next week we’ll research the ingredients for soap, and determine where to purchase the ingredients from, based on price, delivery times and distances from Portarlington.”
“The Victorian government’s recent ban on school banking programs paves the way for quality, school-led programs free from commercial interests.”
The team will also make the soaps, incorporating produce from the school’s kitchen garden, before selling their product to the wider community. To investigate how to sell the soaps, Jasmine says they will “look at surveys and market research, as well as persuasive advertising. When you think about financial literacy, it’s not just about budgeting. You can make it much bigger and integrate it with every single subject, which makes it achievable for all students to be involved.”
The project has created a buzz amongst the school community. “When I presented the business plan to the students, they instantly began planning marketing, products and sharing roles,” Jasmine says. “There was an eagerness to understand how business operates, and what type of financial and mathematical concepts they will need. The parents are excited, the kids are excited, and now other kids are coming up and asking to be part of it, too.”
This positive engagement in the earlier years of schooling can place students in good stead for their senior studies, where Carly says gender divides still occur. “Students who elect to study economics in secondary school are more likely to be male, from higher socioeconomic backgrounds, and attending school in a major city. In short, economics has an image problem.”
While the recent PISA survey indicates no gender difference in the financial literacy achievements of 15-year-old students in Australia, geography and socioeconomic advantage are stark indicators of disparity. Students in metropolitan schools scored an average 78 points higher than students in remote schools – equivalent to two-and-a-half school years – while students from the highest socioeconomic quartile were almost three years ahead of students in the lowest economic quartile.
To address this imbalance, and to increase the engagement of students in financial education, schools can work towards shaking up the traditional image of economics and finance, incorporating a more holistic, integrated approach.
For example, “learning about case studies of corporate hazardous waste and modern slavery can predispose young people to make more ethical and sustainable financial choices,” says Carly. “As does learning about saving money by making do, recycling and upcycling, which is not only good for your personal financial position, but good for the planet too.”
In light of the recent Banking Royal Commission, Carly also suggests exploring consumer rights and protections. “Schools need to prepare young people to ask good questions and be sceptical towards technological innovation. Young people need to be able to call out shonky business practice and escalate a complaint.”
Jai Hobbs, a broker with 15 years of experience in the finance industry, agrees. “I’ve come across a lot of people who have no grasp of finance at all. There are so many areas where you can trip yourself up, from credit to ‘buy now, pay later’ services, to managed investment schemes. It’s fraught with danger if you don’t know what to look out for.”
Jai and his wife Marlies have recently co-authored FLY: Financially Literature Youth, designed to equip young people with the knowledge the pair wish they’d learnt at school. “We spoke to a lot of kids about what they’d learnt at school, and what they’d wished they’d learnt,” says Jai. “The book is based on our own experience of what financial knowledge young people might need – be it related to their first job, super, tax or credit cards.”
Having witnessed numerous clients struggle with debt, Jai feels strongly about making financial literacy more of a focus in the curriculum. “Personally, we believe financial literacy should be mandatory in schools. However, it’s not just up to the teachers. As a nation, we need to work together to get our youth to understand finance a whole lot better, because it’s nowhere near as simple as it used to be.”