10 Financial Skills That Should Be Learned At School

6 October 2017
Knowing how to make sound money decisions is a core skill in today’s world, regardless of age.

The ability to understand money – or lack thereof – affects quality of life, opportunities we can pursue, our sense of security, and the overall economic health of our society.

I doubt many parents would disagree with the concept of their child learning the complexities of money-driven products at school. After all, kids these days graduate with an in-built HECS debt and it just gets worse or better from there when they navigate their path in the real world. The better they are prepared for the transition, the more likely they are to succeed. And that’s what we want for all our children.

Yet recent reports have found that student financial literacy rates are falling. Combatting this is the Australian Securities and Investments Commission’s (ASIC) National Financial Literacy Strategy, which includes the MoneySmart Teaching program, and school banking. The Federal Government committed $16 million toward the continuation of ASIC’s National Financial Literacy Strategy for another four years in 2017.

In the author’s opinion, here are 10 financial essentials children should learn at school:

The Basics – Nature & Function of Money

Primary school kids need to be taught the nature and functions of money, as appropriate to their ages. Saving pocket money, depositing it into their own bank savings account and knowing how much they will need in order to buy that something special are financial fundamentals. These are already being taught through various school banking and financial literacy programs in some schools but mandatory teaching across all schools would pick up many kids who fall through the net.


As the kids move up through primary school, they should be well versed on creating personal budgets. With the added maturity of age, they will want to spend on the latest gadget, or whatever takes their fancy. That’s where a budget shows them exactly what it will take for them to be able to afford that item.

If one was to move out of home, what would they include on their budget? Power, water, mobile phone, internet, rent, gym membership, software subscriptions, sports fees, transport… the list goes on. Budgeting is not an easy skill, however it’s extremely beneficial in planning your finances.


Directly related to budgeting, putting a certain amount of money away regularly will see the ‘goal’ amount being reached within a defined time frame.

Compound interest

Described by Albert Einstein as “the eighth wonder of the world”, compound interest is a powerful force that can be used to advantage if understood correctly. It can be either a friend or foe, depending on whether it applies to a savings or loan account. The formula for calculating compound interest will aid overall financial literacy now and into the future.


The trap with card convenience is that it effectively ‘hides’ money. Admittedly, with a debit card, you can only spend what you have but with a credit card, the temptation is always there to spend more than you can afford. Showing kids how long it will take to pay off a credit card by paying only the monthly minimum required is an eye opener. So too are the practicalities of banking and shopping online, where temptations are high and ‘retail therapy’ can cause your bank account to plummet.

→ What are the interest rates on credit cards? Compare Credit Cards With Canstar

Mobile phones

A must-have in today’s society, teaching kids (from, say, Year 7 upwards) about how to shop for a mobile phone is essential. Comparing contracts and plans to decide which one is right for each individual shows kids exactly what they have signed up for. There are more and more providers of mobile phone plans through different organisations so it’s important to understand the costs of mobile plans and their T&Cs. For example, if you were to go over your call cap, how much will it cost? Is the plan set or customisable? Should you buy a phone outright and use a SIM plan or should you buy via a phone plan? These tricky questions need to be asked in order to understand the specifics of mobile phone purchases.

Mobile phone security

There is a reaction to every action and high school kids need to learn what’s likely to happen if they SMS a vote for a TV show contestant, or give away personal data by entering a competition lured by ‘amazing’ prizes. A sudden flux of spam may well be the result. Subscribing to a dodgy app is likely to steal data, too. And there can also be disastrous consequences of leaving a mobile unattended in a public place.

Understanding Consumer Rights

Your rights under Australian consumer law should be well understood in relation to purchasing or using a product. This can often require a degree of confidence when negotiating with the appropriate body or person, as some are ‘unhelpful’, particularly to the young!  School kids who learn the complexities of money each year are likely to be more savvy in this situation, as they have an understanding of returns, warranties, contracts, lay-bys and other specifics.

For more info, check out the Australian Consumer Law (ACL) site.

The Impact of Advertising

Dissecting advertising strategies, as they apply to purchasing/leasing products or services, opens up new understanding for students on commonly-used ‘persuasion’ techniques. This helps them make more informed choices, rather than buying on impulse or as a result of hard sell techniques which may not be the right thing for them in the long run.


As soon as teenagers start a part-time or full-time job, they will start saving for retirement via their superannuation account. Kids need to have a good grasp of what superannuation is and what their options are in regard to these types of accounts. Many adults have poor comprehension of super so competence in this area by kids having a head start will pay off big time down the track.

And That’s Just The Start…

The ten money issues above are only scratching at the surface. Demonstrations of the use and abuse of a range of banking products, moving out of home, getting a first job, running a business, understanding investment and the different levels of risk it poses are just some of the other topics that come to mind as useful additions to the financial literacy school curricula.

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