The biggest taboo about money is not talking about money, according to Paul Clitheroe, the chairman of the Australian Government’s Financial Literacy Board.
In many instances people are much more comfortable talking about their sex lives than they are about money.
“We need to raise the conversation,” says Clitheroe, whose role is to help improve the financial wellbeing of Australians. But people are often superstitious and secretive when it comes to money and don’t want others to know how much they earn, the extent of their debts and if they have any money troubles.
This is Global Money Week and one way to “learn, save and earn” is to improve financial literacy. Educating the next generation to help them make sound decisions and pick the most suitable financial products is a key role of the Financial Literacy Board.
It works with organisations such as the Australian Securities and Investments Commission, the tax office, financial institutions, financial counsellors, Good Shepherd Microfinance and the Salvation Army to raise awareness.
Clitheroe says the obvious starting point for financial literacy is with kids.
“You have to start early with good habits in life, and money is no different,” he says. “To get the full benefits of strategies such as compounding, it is about the long term and that means getting started young.”
He was speaking at the launch of Netwealth’s partnership with the New Zealand tech company Banqer. It will take a financial literacy program to 15,000 Australian children nationally over the next 12 months.
Students in Year 1 to Year 5 learn money management and personal finance topics such as income, savings and interest while Years 6 and 7 learn about mortgages, rent, tax, and paying excesses on insurance claims, says Clitheroe.
The recent Young Australians Survey by Roy Morgan Research, which covered more than 2500 children aged between six and 13 years, found that 76% of them saved money. Of these, the highest proportion (25%) had saved between $1 and $49.
Meanwhile, most kids surveyed spent their money on toys (44.7%), with 43.6% saving it in a bank. Buying snacks and drinks came in third at 29.3%.
There are 600,000 students participating in school-based programs. About 50% of schools are engaged with ASIC’s MoneySmart teaching program and 6000 teachers have completed MoneySmart’s professional development program.
“All kids deserve a great start to life and being financially literate, being confident and curious, is a huge step towards this goal,” says Matt Heine, Netwealth’s joint managing director.