Invest
Modern education’s great failing
The evolution of human knowledge has come leaps and bounds. It’s like each successive generation is inherently smarter than the last, writes Steve Waters.
Modern education’s great failing
The evolution of human knowledge has come leaps and bounds. It’s like each successive generation is inherently smarter than the last, writes Steve Waters.
Certainly, the fast pace of technology has plenty to do with it, but as I’ve watched my own kids go through their schooling, it’s struck me how much better they seem at tackling increasingly challenging subjects. Thinking back to my own school years, I’m certain we didn’t attempt what’s now classed as Year Four algebra until well into seventh grade, and some of my associates tell tales of their 11 year olds speaking fluent Japanese!
But, for all this increasing intelligence among our youth, there is one great failing letting down the next generation of Aussies.
We continue to ignore the importance of financial literacy.
What is financial literacy
Some of you may be thinking, “what are you talking about Steve? My youngsters are learning about money. They know how to add up a series of coins, and realise they need cash to acquire treats and go to movies.”
Well, of course they do. Access to money and the process of economic trade are an evolutionary skill learned through the mere fact of being in a family and doing stuff.
What I’m talking about is financial literacy beyond the mere recognition of currency. I want to see youngsters who understand the value of the dollar and how, by properly tracking and planning the use of money, they can assure themselves of a low-stress future and plenty of life options.
This is the problem we have at the moment. In this nation, there are few programs that have been created to help educate people about becoming financially savvy and there are few incentives for Aussies to actually take some risks, have a go at smart investing and take care of themselves both today and in retirement.
Where we are failing
I think the problem is that when it comes to financial literacy, we’re reactive, not proactive. What I mean is we put a lot of emphasis on planning for the post-work years when they’re within sight. Suddenly, retirement Is a reality and we need to do something about it ASAP!
Obviously, this ‘end focus’ is important and should be part of an investment strategy, but the great failing is people aren’t taught how to deal with money throughout every stage of their lives. Having this ongoing knowledge around money management and investing would embed smart decisions in our financial DNA.
And it must start early.
I think if we tackled the subject of financial literacy earlier, we’d arm the current generation, and those that follow, with skills to manage their fiscal lives as they grow. An awareness of this sort stays with them throughout the decades, and their knowledge will evolve as they strategise on investing for the future.
This smart set will get to enjoy an acceptable standard of living throughout their working years AND know exactly how to fund their existence once the paycheques stop.
What to teach
Let’s give them some basics.
Learn what a balance sheet and budget are.
It would be so easy to run the hypotheticals with kids about how money coming in is a limited resource, and how utilising that income wisely lets you both enjoy the now and plan for a rainy day.
Let’s expand beyond this too. For example, I think credit cards have become a modern evil. They create more financial woe than benefit. Let’s teach kids about how credit card misuse is a slippery slope for undisciplined spenders.
They should also learn how finance works. Talk about loan applications, the idea of good vs bad debt, and how you can leverage money safely to own a home or build an investment portfolio.
Discuss asset values and cash flow, and the way buffers create a safe environment for you and your money.
I also believe we should start fuelling their entrepreneurial fire. Even for kids who won’t end up owning and operating a business, an awareness of the mechanics around establishing a venture, appealing to customers and using resources would expand their horizons and teach valuable lessons they could apply across many facets of their lives.
Upsides for all
Financial literacy should be mandatory – not just as an advantage to individuals, but as a societal benefit more widely. Imagine what our nation would be like if the next few generations were smart enough to manage their spending and plan for a lifetime of consumption and enjoyment without the stress of draining all their resources.
Imagine an Australia where the entrepreneurial spirit is cheered on and innovative thinking became a mainstay of productivity.
Unfortunately, this is not being addressed at school level, with hungry young minds more likely to use the university of Google to seek out knowledge on finance.
Until we see finance given a front and centre position in our education system – it should be replacing less practical subjects in the curriculum – we’re doomed to have a society full of citizens chasing their financial tails from cradle to grave.
Steve Waters is the founder and director of Right Property Group.
This email address is being protected from spambots. You need JavaScript enabled to view it.
About the author
About the author
Spending
How much are you wasting on unused subscriptions?
Australians are continuing to pay for subscriptions they are not using, costing households up to $2,000 a year, new banking figures have revealed. ...Read more
Spending
Viagogo under the microscope for ‘ripping off’ consumers
Viagogo is under investigation by Fair Trading after ticket scalpers have been accused of raking in excessive profits through the ticketing site. ...Read more
Spending
Consumer spending defies lockdown
Statewide lockdowns have not hampered consumer spending, with the latest government data showing Aussies are continuing to spend more on their credit cards. ...Read more
Spending
How a cartel is dictating how much you pay at the pump
Talks among members of the OPEC cartel and allied oil producing countries have broken down, which is leading to skyrocketing oil prices, meaning everyone pays more for petrol, a government body has re...Read more
Spending
Have you noticed the price of your mobile plan increasing?
The consumer watchdog has revealed that the three main telecommunication providers have recently raised prices, meaning millions of Australians are now paying more for mobile services. ...Read more
Spending
Victoria’s lockdowns dampen retail spending
The latest COVID-19 outbreak in Victoria has dented national retail figures, as the economy continues to recover from the COVID-19 pandemic. ...Read more
Spending
It should be easier to fix your phone, Productivity Commission finds
The Productivity Commission has found that it should be easier for Australians to get their smartphone repaired and has recommended changes that include ‘super complaints’ to be reported to watchd...Read more
Spending
You can win free flights for a year, but there’s a major catch
In a bid to keep Australia’s domestic aviation afloat, Qantas is offering free flights for a year for 10 families of four who get the COVID-19 jab, even though the failed vaccine rollout means only ...Read more
The Olympic effect on property and equity investors; COVID-19 Disaster Payments and super
Listen now
Do lockdowns boost property prices? Are short-sellers levelling the playing field? Did you lodge your tax returns early?
Listen now
Will lockdowns halt the housing boom? Is the metaverse taking over? And the cons of lodging your tax returns early
Listen now
Are you being priced out of the market? Have you got the Tuesday blues? And are you ready for the upcoming super changes?
Listen now
Spending
How much are you wasting on unused subscriptions?
Australians are continuing to pay for subscriptions they are not using, costing households up to $2,000 a year, new banking figures have revealed. ...Read more
Spending
Viagogo under the microscope for ‘ripping off’ consumers
Viagogo is under investigation by Fair Trading after ticket scalpers have been accused of raking in excessive profits through the ticketing site. ...Read more
Spending
Consumer spending defies lockdown
Statewide lockdowns have not hampered consumer spending, with the latest government data showing Aussies are continuing to spend more on their credit cards. ...Read more
Spending
How a cartel is dictating how much you pay at the pump
Talks among members of the OPEC cartel and allied oil producing countries have broken down, which is leading to skyrocketing oil prices, meaning everyone pays more for petrol, a government body has re...Read more
Spending
Have you noticed the price of your mobile plan increasing?
The consumer watchdog has revealed that the three main telecommunication providers have recently raised prices, meaning millions of Australians are now paying more for mobile services. ...Read more
Spending
Victoria’s lockdowns dampen retail spending
The latest COVID-19 outbreak in Victoria has dented national retail figures, as the economy continues to recover from the COVID-19 pandemic. ...Read more
Spending
It should be easier to fix your phone, Productivity Commission finds
The Productivity Commission has found that it should be easier for Australians to get their smartphone repaired and has recommended changes that include ‘super complaints’ to be reported to watchd...Read more
Spending
You can win free flights for a year, but there’s a major catch
In a bid to keep Australia’s domestic aviation afloat, Qantas is offering free flights for a year for 10 families of four who get the COVID-19 jab, even though the failed vaccine rollout means only ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
