My son told me something shocking. It’s why kids need more money smarts

My 15-year-old son and I were chatting money the other day, as we often do, and he said something that shocked me: “In my 10 years of schooling, I’ve only done one thing on money – we had to set up a food stall, make all the purchases, sell the food and make a profit.“

Now, I was a champion of the fabulous Australian Government Financial Literacy Board and I cheered its success at getting money smarts embedded in the national curriculum, now more than a decade ago.

It was a massive victory of research, communication and negotiation. But yes, my son has now been at school for 10 years, during which our students are supposed to get 10 years of financial literacy lessons, implicitly rather than explicitly in particular subjects. And he has done one exercise.

Let’s lay out the problems with that.

Just over half of young Australian men (54 per cent) and just under half of women (47 per cent) aged 18 to 29 years old are still living under the same roof as their parents, according to the Household, Income and Labour Dynamics in Australia (HILDA) survey of more than 17,000 Australian households.

Of course, related is that the number of young Aussies buying a home has been falling since the 1980s, according to census data. If they do manage it, the average age is 36, says the University of NSW.

Whenever anything happens where money is in the background, just put it in the foreground.

What of their parents? Well, compared to 20 years ago, Australians aged 60 to 69 are working longer, HILDA says. And we know the unofficial bank of mum and dad is today one of our largest in the country.

It’s such a big issue that New Zealand will from next year include financial literacy as a mandatory part of the school curriculum, in social sciences. This will be from year one to year 10.

Meanwhile, here, financial concepts are only a (tiny) prescribed part of the curriculum in maths, with maybe a smattering of mentions in other subjects. My son did not take economics or business and therein might lie a problem. However, money is supposed to be embedded in such subjects as English and science.

Australia also no longer has a national financial capability strategy, unlike 70 countries around the world.

Yep. Mysteriously, responsibility for our nation’s money smarts was transferred from the Australian Securities and Investments Commission to Treasury several years ago, and not much has happened since.

This is when over two-thirds of teachers (73 per cent) and one-third of parents (38 per cent) think financial education has become even more important in the past 12 months, found a study by not-for-profit education charity the Ecstra Foundation this year.

This belief is due to inflation and economic uncertainty, financial system complexity and the growing influence of social media and the move to digital transactions. Moreover, Ecstra’s study found teachers (98 per cent) and parents (97 per cent) want money lessons in schools.

Seventy-three per cent of parents and 68 per cent of teachers and students think this should be in classroom lessons, by far the preferred option to workshops and incursions.

It all begs the question: are we really going to let New Zealand schools better ours? Because we – personally and nationally – can’t afford to.

For now, it’s clear the bulk of responsibility for children’s money smarts and for children being ever able to move out, falls to their families. Unfortunately, 24 per cent of parents report personal knowledge gaps and 16 per cent are not sure what to teach, says Ecstra.

So how can you best equip your kids for the real financial world if school is not going to? Just two basic things will make a world of difference.

The first is simply “walk the walk”. What’s called observational learning – or watching your behaviour with money – counts hugely. If you’re not great with money, maybe try and convey that you are.

But be acutely aware that digital money means kids can’t actually see much. So here’s the second strategy – and what I was doing when my son dropped his school bombshell: what I call “talk the walk”.

And that’s carefully and consistently explaining what’s happening when you make purchases without cash – when your bills are paid automatically, invisibly, when cars and food magically appear all the time to move you and feed you.

Whenever anything happens where money is in the background, just put it in the foreground.

For the above reasons, I’ve written often that I like using cash in our family where possible. But with the shift to electronic also comes opportunities … and it’s well worth mentioning to your kids that micro-saving and/or beginning to invest through an app or service, could shore up their financial future.

Nicole Pedersen-McKinnon is the author of How to Get Mortgage-Free Like Me, available at www.nicolessmartmoney.com. Follow Nicole on Facebook, X and Instagram.

• Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.

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