Financial education to help young Aussies survive financial shock

Suncorp has partnered with national charity the Financial Basics Foundation to launch the Financial Rules of Thumb, a free online resource kit to help parents talk to their children about money.

Financial Basics Foundation Chair Brigid Leishman said Australian school children deserve every chance to be taught the fundamentals of money to secure their financial future and be ready for a rainy day.

“As communities face the economic and social impacts of COVID, hundreds of thousands of young people have lost their jobs, families are being forced to prioritise their spending on essentials – it’s a very tough lesson,” Ms Leishman said.

“Through the online kit, we’re helping to equip parents and carers with an easy online toolkit to help them reinforce good money habits with their kids.”

Suncorp Bank CEO Lee Hatton said the aim of launching the Financial Rules of Thumb kit was to equip young people with the right education to take charge of their financial future.

“Australian teenagers are digitally savvy so we’re bringing learning to life through digital to give them hands-on experience in budgeting, investing or paying bills.

“Educating our children on the financial basics will help them weather challenging times later in life,” Ms Hatton said.

This comes as new research shows financial literacy should be introduced as a stand-alone high school subject to better prepare Australians for major financial shocks, such as the COVID-19 shutdown.

A research paper, by Queensland University of Technology (QUT) and commissioned by the Financial Basics Foundation, highlights the need for teenagers to have formal financial education.

QUT academic, Ryan Menner said the younger we teach children about earning, spending, saving and investing money, the better they’re able to handle their financial future over their lifetime.

“Young people under 25 often lack financial experience, education and income, which can make them particularly vulnerable to financial hardship,” Mr Menner said.

“Financial literacy is covered in parts of the Australian curriculum but it’s optional and usually included as part of economics or life skills classes however it needs to be a stand-alone subject,” he said.

With so many families forced to stay home together during the COVID-19 pandemic, Mr Menner said parents could use the opportunity to draw on day-to-day experiences and talk to children about money.

Research from the OECD[i] indicates experience with money matters will go a long way in improving financial literacy. The OECD Students' Financial Literacy report found, in ten of 13 countries, discussing money matters with parents was associated with children having a higher level of financial literacy.

“We are living in a global financial crisis of an unprecedented scale, and I cannot think of a better time to draw on day-to-day experiences to build stronger foundations of financial literacy for Australian school children.”

THE FIVE FINANCIAL RULES OF THUMB 

1. PAY YOURSELF FIRST – always put aside a portion of your money for savings.

2. SPEND LESS THAN YOU EARN – make a budget, so you know exactly what you can afford.

3. SHOP AROUND – compare and shop around, you might find it cheaper.

4. TIME IS MONEY – the longer you save, the more interest you can make.

5. SLEEP ON IT – don’t rush into big purchases, take time to think it through.

Find out more at suncorp.com.au/learn-about/finance-for-kids

[i] https://www.oecd-ilibrary.org/education/pisa-2015-results-volume-iv_9789264270282-en