Should financial literacy be taught in schools?

article header

RateCity 2018 Business & Finance Scholarship winning essay

The RateCity 2018 Business & Finance Scholarship was a chance to win $3,000 towards learning expenses.   

Larissa Zhang, UNSW Actuarial Studies/Commerce student, submitted the winning essay, answering the question “should financial literacy be taught in schools? Why or why not?” Congratulations Larissa!

When discussing financial literacy, it is essential to first answer the age old question: can millennials really afford to buy a house if they stop eating smashed avocados on toast? While that certainly is an exaggeration, the stereotype that young adults do not make sound financial decisions to maintain their financial wellbeing is definitely an issue that needs to be tackled.

In recent years, there has been a growing recognition of the economic and social obstacles youth face in making successful transitions to adulthood. Amidst housing affordability pressures and vulnerability to exploitation, financial education is a key enabler of a young person’s move to economic independence.

Greater financial literacy and awareness is a stepping stone for youth today to take on the booming housing market in Australian cities – a phenomenon where the great Australian dream of home ownership has become largely elusive. A growing divide is created from older generations capturing an increasing share of the nation’s wealth. Home ownership rates among households headed by 25-34-year-olds fell from 60% in 1981 to 45% in 2016. This trend has real consequences for family finances and the capability of youth to uncover their place in the world.

According to property developer Tim Gurner in 2017, “we are coming into a new reality where … a lot of people won’t own a house in their lifetime. That is just the reality.” Introducing financial literacy into the school curriculum can instil that eye-opening reality into student’s expectations of their future. By understanding early-on the challenges they must tackle in order to achieve financial independence, greater industry awareness can prepare them for effective decision-making of financial products in a world of overpowering pressures.

Consumer protection starts with youth taking responsibility of their finances in the face of a dynamic and competitive market. Services such as Afterpay and credit cards that provide immediate funds are tempting in the perspective of a low-income youths, despite the promise of instant purchase and deferring the financial burden into the future promoting irresponsible spending and trivialising the significance of being in debt. As revealed in the Royal Banking Commission, the big banks are not fulfilling their due diligence to ensure borrowers’ repaying capacity – furthermore failing to comply with the best interests of customers in 75% of the advice files that ASIC reviewed. Being accountable for their own finances, youths can avoid being exploited by the major corporations and plan for their future wellbeing.

The government should act to incorporate financial literacy within the curriculum to better educate and protect the next generation before unsustainable debt overcomes the economy. Engaging young people in the financial world instills in them healthy financial behaviours. Through teaching financial literacy in schools, students can benefit by making informed decisions in a dynamic landscape of competitive consumer products to establish greater financial security. Ultimately, better education can provide youth with a clearer orientation towards their future goals and the role they can play in the world.

By Larissa Zhang


^Words such as "top", "best", "cheapest" or "lowest" are not a recommendation or rating of products. This page compares a range of products from selected providers and not all products or providers are included in the comparison. There is no such thing as a 'one- size-fits-all' financial product. The best loan, credit card, superannuation account or bank account for you might not be the best choice for someone else. Before selecting any financial product you should read the fine print carefully, including the product disclosure statement, fact sheet or terms and conditions document and obtain professional financial advice on whether a product is right for you and your finances.

Compare your product with the big 4 banks, or add more products to compare
As seen on