Why Financial Literacy Is A Win-win For Australia

Exactly What do Australian 15-year olds share with their peers in New Zealand and Estonia?

Well, inning accordance with the Program for International Student Assessment (PISA) report, Australian, Kiwi and Estonian teenagers rank third-equal in the world for their monetary literacy skills.

The PISA study, an effort of the Organisation for Economic Co-operation and Development (OECD), found only 15-year olds from the Flemish-speaking areas of Belgium and their counterparts in Shanghai comprehended financing much better than Australian children.

While this is a motivating result it is very important not to check out excessive into it. In the first place, PISA surveyed only 18 nations for financial literacy.

And second of all we needed to share third-place honours with the Kiwis (Estonia we can live with), which shows that Australia has significant space for enhancement in monetary literacy.

This has actually been acknowledged by a broad variety of stakeholders, including the Australian Securities and Investments Commission (ASIC), which is collaborating a nationwide push to enhance monetary literacy across the board.

In its just-published ‘National Financial Literacy Technique‘, ASIC lays out an in-depth plan of action encompassing school curriculum, complimentary details services, guidance programs, market collaborations and ongoing research study.

ASIC specifies monetary literacy as “a combination of monetary understanding, skills, mindsets and behaviours necessary to make sound financial decisions, based upon personal circumstances, to enhance financial health and wellbeing”.

” In today’s busy consumer society, monetary literacy is an important daily life ability. It indicates having the ability to comprehend and work out the financial landscape, handle money and financial risks successfully and avoid financial mistakes,” ASIC says. “Improving monetary literacy can benefit anyone, regardless of age, earnings or background.”

I totally support the effort to raise the level of Australians’ financial literacy. As a financial consultant I get to see first-hand the, in some cases big, holes in monetary knowledge in the Australian neighbourhood.

Cynics might argue that the financial literacy gap really suits the advisory market. From my viewpoint, the much better the grounding our clients have in monetary principles, the more efficient and efficient the advisory relationship.

With a financially-literate population, advisers can cut straight to the real issues instead of training finance 101.

Our money-smart 15-year olds augur well for the future. (By The Way, while PISA deemed it as “not significantly different”, Australia had a mean score of 526 in the financing test compared to 520 for NZ, which we can take as a win.).