Financial literacy starts at school

By Niamh Cremins

Financial literacy levels in Australia are relatively low, yet Australians are increasingly forced to take more responsibility for their financial futures, in particular planning for retirement. Ongoing research is attempting to determine the best way to improve financial decision-making and long term behavioural outcomes. One promising avenue is early intervention to improve awareness and understanding of financial matters among young people, aimed at bringing about sustained behavioural change.

WritingStreet Finance is a pioneering Bachelor of Commerce (BCom) subject that combines education, community engagement, and research, to address the financial challenges facing young Australians today. Combining expertise from the Faculty of Business and Economics (FBE) and the Melbourne Graduate School of Education (MGSE), Street Finance equips finance students to teach secondary school pupils in diverse communities the skills they need to navigate the ever complex financial world of bank accounts, debit cards, mobile phones and online shopping.

Senior Finance Lecturer, Dr Carsten Murawski, who designed the course with colleagues Professor Carole Comerton-Forde (FBE) and Catherine Reid (MGSE), says that one quarter of 12 to 20 year olds in Australia have had some form of financial debt, with young people from disadvantaged backgrounds at particularly high risk of encountering financial troubles.

"Often financial dilemmas are consequences of a lack of information or misinformation about financial products", says Dr Murawski. "These early financial mistakes can sometimes have long lasting effects on a young person's future. Street Finance is unique in its potential to engage students at an early age and investigate the impact of early intervention for long term behavioural change in financial management."

Over eight weeks, the BCom students learned about key financial concepts and received expert training in lesson planning and delivery.

"The students who enrolled were passionate about improving financial literacy and getting the best possible outcome for the local communities", says Professor Comerton- Forde. "And, the cross-discipline partnership with MGSE provided the expert knowledge in lesson design required to make Street Finance a success."

Practitioners also joined the teaching team to provide an additional layer of industry and public policy relevance. Gerard Brody, CEO of Consumer Action Law Centre, presented a guest lecture on consumer rights, as well as financial counselling and legal advice, and Gillian McIlwain, Research and Policy Manager at Good Shepard Microfinance, provided an overview of the scope and complexity of the finance issues people face.

The BCom students then delivered three lessons on basic financial knowledge in high schools in Victoria, covering topics relevant to 15 – 17 year olds including budgeting, savings, credit, mobile phones and bill shock, and consumer rights.

BCom student Daniel Odoi participated in the inaugural semester of Street Finance because he wanted to complete his undergraduate degree with a unique subject experience.

I am passionate about mentoring, educating and empowering young people, and I truly hope I was able to motivate and mobilise my students, so that in the future they will make more confident financial decisions and achieve financial independence.

While the topics covered resonated with the teenagers, the classroom environment uncovered other significant issues that are influencing young peoples' financial decisions. According to Comerton-Forde the finance space is evolving quickly.

"We are reviewing the content for next year based on what we learned in the high schools during the pilot," she says. "In particular we will include new payment apps and PayPal, which make online purchasing easier than ever."

Enhanced financial literacy can be assessed in terms of understanding, awareness and behavioural change. The research component of the project will be conducted from 2016 to determine the efficacy of Street Finance over time. All pupils in the participating classes will be assessed on their financial knowledge, attitudes and behaviour, before and after the lesson, and the results compared with pupils who did not receive a lesson from the BCom students. A follow-up assessment approximately six months after the lesson will determine the long term value of such curriculum in financial literacy and go some way towards understanding how teaching may influence financial behaviour over time.

Early intervention education is one of a number of avenues to systematically change peoples' behaviour, explains Murawski. We don't know what the real impact will be but we are eager to advance knowledge in this area and help improve financial literacy.

The learning outcomes of the Bachelor of Commerce students will also be analysed using the same evaluating framework. Experiential learning is a proven teaching method across many disciplines, particularly medicine and law, but is a relatively new concept in finance. According to Catherine Reid, Lecturer in Language and Literacy Education, the commerce students' feedback has been positive in terms of how Street Finance enabled them to develop their subject knowledge.

Learning a subject so that you can teach it to someone who knows nothing about it requires a deep understanding of that subject matter, explains Ms Reid. The students also developed exceptional communication, organisational and leadership skills vital to lesson delivery.

Odoi agrees and while delivering his lesson was challenging, it was also extremely rewarding.

"It was important to deconstruct financial concepts, articulate, and then translate them into relevant class material that the students could connect with", he says. "Through the lesson prep and delivery, I reinforced my own understanding of financial concepts and challenged myself to review my own budgeting and financial goals."

Street Finance will be offered again in 2016.