For generations, schools, teachers and parents around Australia have relied on the finance industry for money-related expertise and education for our children. We now know that our trust was misguided. Australian school children may well leave school with a preferred bank but many are unprepared for the complex financial problems and decisions they will face as young adults.
I led a research team that looked into the teaching of consumer, economic and financial literacy in government, Catholic and independent secondary schools in Victoria. Our findings could be useful to policy makers, schools, teachers and other interested stakeholders dealing with this issue.
The inconvenient truths
In Australia we regularly invite representatives of banks and financial institutions into our schools to teach our children about managing their finances. Many schools have been using the school banking programs they offer.
However these banks and other financial institutions have been using this access to students to employ subversive sales tactics, blatantly market brand awareness and coach brand loyalty.
Left without essential knowledge
We also know around one in five Australian fifteen year-olds are left without the essential knowledge and skills to confront relatively simple “real world” financial tasks such as reading pay slips and invoices and detecting scams. In PISA testing of the financial literacy of fifteen year olds, Australia’s performance “declined significantly” between 2012 and 2015.
Unknown professional learning needs and impact
Since the global financial crisis, the Australian government and the finance industry have invested significantly in initiatives intended to help young people understand finance. However there remains limited independent, peer-reviewed research exploring how Australian schools and teachers make sense of and approach their work as consumer, economic and financial literacy educators. This means that the impact of these various initiatives on school programs, teacher practice and student learning is largely unknown. By extension, so too are teachers’ professional learning needs and interests in this field.
Our research study
The Monash University and the Victorian Commercial Teachers Association (VCTA) research study that I led explored secondary commerce teachers’ opportunities and readiness to teach consumer, economic and financial literacy.
The teacher survey we conducted as part of that study revealed some startling statistics.
- Less than one-third of those surveyed reported that their school offers compulsory subjects or units that are dedicated to teaching and learning about consumer, economic and financial literacy.
- The top five topics taught about finance to Year 7 to 10 students are actually found in the Mathematics curriculum. These include calculating the cheapest price per unit of measurement; reading and interpreting financial information presented in tables, charts and graphs; calculating simple interest; calculating compound interest, and making sense of a payslip, including calculating tax and superannuation payments. In mathematics, algebra prepares students to understand and manage loan, superannuation and investment products. Here, students learn that when one variable changes (i.e., interest rates rise), there is an inevitable impact on one’s financial position (i.e., loan repayments become higher, but so too do returns on savings).
- While just over half of those surveyed (54%) reported teaching students to take action in response to a too-good-to-be-true or suspicious offer that might be a scam, the number that reported teaching students to identify an email scam was much lower (31%).
- Related to the above, only one in five of those surveyed (18%) reported teaching students how to decide whether to provide bank and/or credit card details when paying for products and services online (including apps).
Useful teacher insights
We used the survey results to identify a number of teacher insights that interested stakeholders might use to support the work of schools and teachers as consumer, economic and financial literacy educators.
- Provide practical programs. Students need practice solving “real life” financial problems and making financial decisions. The classroom can be a safe and supportive place to do this.
- Convince students that mathematics is really useful in helping with finances. Connect the usefulness of mathematics to making every day decisions about finances, especially those that schools leavers will need to make with their finances.
- Instil scepticism. Australians lost almost half a billion dollars to scams last year. Children should be taught to be wary of too-good-to-be-true or suspicious offers, invitations and messages received online.
- Encourage critical thinking. Teach students the importance of asking themselves and others good questions: How can I tell if I am being misled? Have I considered all available facts and evidence? How will this decision impact me in the short- and long-term? How will this decision impact others (family members and the natural environment)? Where can I get quality advice that I can trust?
- Teach students to transact safely online. Technological innovations mean we can transact conveniently with a click or a tap. Digital payment apps like Afterpay, while appealing, are poorly regulated. Students need to be taught how to decide whether to provide bank and/or credit card details when paying for products and services online (including apps).
Knowing students is central to teaching them well. I believe it is particularly important for schools and teachers to have local conversations about the financial realities students have to deal with today, especially those facing soon-to-be school leavers and the sorts of learning experiences that might prepare them to be financially capable.
With the right professional learning and support, schools and teachers can identify the financial literacy learning needs that exist within their local communities and design savvy programs to meet these needs.
For those who want more
Readers can sit the OECD PISA financial literacy test items here.
Carly Sawatzki is a lecturer in Maths Education in the Faculty of Arts and Education at Deakin University. Carly’s ongoing educational design research program has to date been situated within the Encouraging Persistence Maintaining Challenge (EPMC) project (an Australian Research Council Discovery Project, DP110101027). As the lead researcher exploring the topic of ‘Money and financial mathematics’ she has worked collaboratively with upper primary school teachers and students in Australia and New Zealand to create and research open-ended financial literacy tasks. Carly’s other research interests include curriculum innovation; numeracy and mathematics task design; mathematical problem-solving in real world contexts; and pedagogical coaching to enhance teaching and learning. Carly is on Twitter @CarlySawatzki