Life, Money

Are we giving kids the money skills to live better lives?

Published on May 25, 2017 3:16 am, by

A new report issued yesterday shows that the financial literacy of Australian teenagers has declined significantly since 2012.

Australian teenagers scored 5th out of the 15 participating countries well behind countries like China, Belgium and Canada.

According to the report, 20% of Australian teenagers failed to reach Level 2 proficiency which is considered the base level of proficiency for teenagers. At this level, kids can make money decisions in situations that are immediately relevant to them, recognise the value of a budget and can interpret prominent features of everyday financial documents. They can also apply basic calculations to answer financial questions.

So what can you do to improve the financial literacy of your kids?

Discuss money matters with your kids, regularly
For many kids parents are the main source of education and habits about money. Kids that regularly discuss money matters with their parents have higher levels of financial literacy

Give your kids access to basic banking products
Kids with a bank account have higher levels of financial literacy than those that don’t. Having access to a bank account introduces kids to a range of issues about money which is beneficial

Help them understand where money comes from and that it is finite
Giving kids the opportunity to earn pocket money or an allowance for doing chores can help kids learn these things and set them up well for the future

Help your kids build good spending habits
Helping kids understand the difference between needs and wants, what things cost, and the importance of budgeting are important life skills they can learn from their parents

Help them build good saving habits
Kids who save regularly tend to have higher levels of financial literacy and kids can learn to save from their parents.

You should also check out our fun video on How to teach your kids about money.

If you want to have a look at the entire report it’s called PISA 2015: Financial Literacy in Australia

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Peter is the CEO of MoneyBrilliant. He has over 20 years experience in banking, insurance and accounting. Peter has three sons, ranging in age from 16 to 3, is a sport and fitness fanatic and a volunteer firefighter. He is passionate about improving people's lives through making financial services more accessible.

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