Most Australians aren't ‘good with money'. It's time that changed
Meanwhile, in the United Kingdom, Mexico, Japan and South Africa, women's literacy on all things money isn't just as good as the gents, it's better.
But what was easily the most concerning finding was that among those aged 15 to 24, the score out of five was just 2.9. That, my friends, is a seriously mediocre C-grade.
Perhaps 50 years ago, when the choices were between a couple of basic bank products and a superannuation account, these numbers wouldn't have been so concerning.
But in a world of countless different types of specialised bank loans, HECS debt, credit cards, buy now pay later schemes, online gambling, cryptocurrency, ETFs, salary negotiations, bonus structures, stock options, and self-managed versus industry or corporate super funds, it's never been more important to ensure that everyone, especially young people, is literate when it comes to money.
Though the Australian curriculum does include financial literacy content, the way in which it is being taught and the detail within that vary greatly, leaving much room for improvement.
One country leading the way in this field is, believe it or not, the United States. According to the US' Council for Economic Education, as of 2024, 35 of the country's 50 states now require high school students to attend personal finance classes before they graduate.
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That's more than two-thirds of teenagers across America having a basic understanding of money and finance before they leave home and enter the world of adulthood and employment.
The trend is also taking off at American universities, where a growing number of public and private institutions are offering personal finance courses for students as electives. These courses teach the basics, but some go further and cover the principles of investing, taxes, how to understand job offers and salary packages, as well as the psychology of why people make certain financial decisions.
As much fun as those 101 literature or psychology electives can be, this seems like a much more useful course to be aiming for an easy A in.
Aside from the fact that we live in much more financially complicated times, there are other reasons we need to care about making sure our kids understand money.
For starters, research consistently shows that the better financially educated someone is, the more likely they are to make good decisions and better judgements about their money.
We also know that the cost of being totally financially illiterate or having a poor understanding of money can have devastating long-term effects. People who are 'bad with money' are consistently shown to have a lower standard of living, and we see the wealth gap widening between the 'haves' and the 'have-nots'.
So easily, one high-interest credit card or personal loan can follow someone around for decades and impact their credit scores, their ability to make career or relationship choices, create extra stress, and make it harder to meet their basic needs. And yet, we see it happen every day, often affecting people you'd least expect.
Having a solid grasp on finances isn't just about us as individuals, either. Ensuring everyone knows the basics, especially those who are the least financially literate, is actually great for the economy broadly.
That's because it allows people to carry less debt, improves their job opportunities and earning potential, and creates new jobs in the process. To quote former assistant RBA governor Keith Hall all the way back in 2008: 'Money spent on financial education would be money very well spent.'
And while it's not as if we're doing nothing, we certainly need to be doing so much more. Because the more people who can hold their head high and say they're 'good with money', the better.
Victoria Devine is an award-winning retired financial adviser, bestselling author and host of Australia's No.1 finance podcast, She's on the Money. She is also founder and director of Zella Money.
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