Financial Literacy of Young Australians

A significant number of Australians struggle to manage their money, and one in three people find dealing with money stressful and overwhelming (ASIC, 2018).

Increasingly complex financial choices and products bring a need for consumers to be empowered with knowledge and to understand the consequences of their financial decisions.

The first National Financial Literacy Strategy set the foundation for “using educational pathways to build financial literacy for all Australians” (ASIC, 2011, page 6).

The second National Financial Literacy Strategy set the first priority to 'educate the next generation, particularly through the formal education system', which resulted in financial literacy education being formally integrated across Australia’s network of approximately 9,500 schools (Blue et al., 2014).

Despite this strategy, the Program for International Student Assessment (PISA) tests of 15-year-old school students show a decline in average financial literacy scores from 526 in 2012 to 504 in 2017.

Worryingly, school students indicated they would reply to scam emails, provide their ‘lost’ online banking details or click on a link provided within an email and follow the instructions instead of contacting their bank (Singhal, 2017).

Regarding general financial literacy indictors, evidence consistently shows that being young, female, a single parent, in poor health, unemployed and with low income and wealth increases the likelihood of low levels of financial literacy (West and Worthington, 2017).

The latest National Financial Capability Strategy (released in August, 2018) highlighted four cohorts of particular interest:

• Women Young People
• Older Australians
• Indigenous Australians

Supported by Suncorp and the Financial Literacy Foundation, this research focuses on two of the cohorts of interest: women and young people, ie young women.

An extensive number of studies have found females outperform males overall in high school, outnumber males in university, and are higher qualified in the workforce.

However, there remains consistent evidence that women, and in particular young women, have lower financial literacy levels than men (Chen and Volpe, 2002; Mandell, 2008; Lusardi, Mitchell and Curto et al., 2010).

To investigate this issue, interviews and focus groups were conducted at four Queensland schools; two in a regional area, and two in an urban area. In total, 16 focus groups and 32 interviews were conducted. These were analysed using thematic analysis.  

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