Financial literacy doesn’t come naturally
Article by Mary Ward
In the absence of dedicated financial literacy instruction in school curricula. Australian parents are taking a hands-on approach to their children’s financial education.
According to recent research by TAL, Australia’s largest life insurer, just 4% of parents rely on schools to teach their offspring to be money-smart and only 10% of parents think financial literacy comes naturally as children grow older.
While parents overwhelmingly view themselves as in charge of ensuring their children are financially literate, they try to achieve this in a variety of ways.
Part-time jobs remain the most common way for parents to encourage their children to be financially responsible, with 62% of parents surveyed saying they believe in encouraging children to earn money out of the home.
Leading by example was the next most popular method (61%), followed by encouraging children to be entrepreneurial (33%).
There were certain differences between the attitudes of older and younger parents. While part-time jobs were the most popular way parents encouraged their children to be financially literate, they were considered a more valuable tool by baby boomer parents (70% of whom said they were an appropriate method) than Gen Y parents (where they were only supported by 55% of respondents).
The opposite trend was found in parents encouraging their children to be entrepreneurial, a method favoured by younger parents (47%) more than any other group.
TAL Group CEO Jim Minto said, “The results show there is no single right way to teach children the value and importance of money”.
“But what is clear and encouraging from the results is the majority of parents don’t believe in a hands-off approach,” he said.
“Building and protecting your financial wellbeing is not something to be left to chance.”
Want to start your kids off on the right financial foot? Compare kids’ savings accounts on Mozo today.