Extract from ABC News
Should financial literacy be a compulsory subject in schools?
It's a straightforward question with a contentious history and no consensus on an answer.
Yet as states and territories begin to phase out school banking programs (think Dollarmites), some experts are saying there needs to be a dedicated model to teach our youth just how to handle their money.
English, science ... personal finance?
For Jai and Marlies Hobbs, the problem is clear: Australians, particularly kids, don't understand the fundamentals of money.
Jai is a mortgage broker and Marlies is a former property development lawyer.
Together, they have started and run multiple businesses and have two kids.
Their experience has taught them a couple of things.
"People didn't really understand the ramifications of their decisions," Jai said of the clients he was seeing.
"It was something as simple as not paying a $200 phone bill and how that would later on affect them in life, for getting a home loan or furthering their finance and investing.
In other words, people were getting into debt, hurting their credit rating and didn't know any better.
Part of the problem was a lack of education, Jai said, something he knew firsthand.
"I came out of school not knowing anything about finance," he said.
"So that was a real drive for us to make sure that didn't happen and didn't repeat on our own children."
The couple has just released a new book titled FLY: Financially Literate Youth, which steps through everything from opening a bank account to understanding credit records and buying a house.
And Marlies is certain on one point: education needs to be bolstered in schools.
"Financial literacy should be a compulsory subject throughout all of schooling, just like English and maths," she said.
"No matter what career you end up in, and what income level you end up in, it's what you do with that income that's going to determine the success of your future.
"So, yes, we absolutely feel that it should be a compulsory subject, throughout schooling and especially in high school."
The banks moved in
Money matters are currently taught in schools, with the Australian Curriculum carving it out as a "sub-strand" of mathematics.
The curriculum says kids should be taught things like how to calculate compound interest and "investigate and calculate 'best buys'".
Year 8 students, for instance, should learn how to "solve problems involving profit and loss".
Despite the stated aim, it's not having enough of a real-world impact, says Scott Pape.
Pape is best known as the "barefoot investor" and is now a volunteer financial counsellor.
"Managing money is the one exam you're going to be tested on every day of your life," he told Radio National's Life Matters program.
"And the fact that too many Aussie kids graduate from high school really having learnt nothing about financial education is really just not cutting the mustard.
"What we've seen is that in the last 20, 30 years financial education really hasn't really gone anywhere in schools.
"But the banks and financial institutions' ability to trap and target young people has become ever more sophisticated."
He's referring to school banking programs, like the Commonwealth Bank's Dollarmites.
These are the corporate-backed programs that promise to teach kids about savings and money.
They have become the focus of intense criticism in recent years, with corporate regulator ASIC finding there was "limited evidence" they helped kids learn how to save.
Consumer group Choice was more blunt, labelling Dollarmites in particular a "thinly veiled marketing program".
Victoria has banned school banking programs as of this year, and just this week the ACT followed suit.
Parents v schools
The Dollarmites program continues apace, despite the pushback, and it's not alone.
In 2019, nearly two-thirds of schools took part in some school banking program.
Part of the reason they remain popular is because of parents, according to Catherine Attard, an associate professor of Mathematics Education at Western Sydney University.
"I think with a lot of schools it's just force of habit," she told Life Matters.
"It's also pressure from the parental community, because if you experienced school banking when you were at school it's something that you want your children to experience."
Ms Attard calls these programs a distraction, not an education, and instead advocates teaching kids critical thinking around money.
"It's more about consumer literacy, not just financial literacy," she said.
"When you think about teenagers having to decide on mobile phone plans, you need a lot of critical skills to be able to understand what you need first of all and then what plan best suits your individual needs."
Anecdotally, parents are also reporting it has become harder to teach kids the day-to-day money management as Australia moves closer to a cashless society.
With coronavirus also seeing many businesses reject cash, those incidental transactions have been lost too.
Factor in "buy now, pay later" services like Afterpay and ZipPay and it's a far more complicated world than a generation ago.
As for Pape, he too backs the calls for schools to take a greater role in financial literacy and argues it shouldn't be left to parents.
"Kids still listen to their parents ... but my view is schools should be a conduit to actually having those conversations with parents," he said.
"It really needs to be that kids needs to learn about these things in school, because they are life matters."
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