Australians’ financial literacy went backwards between 2016 and 2020, but the falls were largest among young Australians and women.
Australians’ financial literacy went backwards between 2016 and 2020, a major study of household wealth and wellbeing has found, in a result that left researchers “dumbfounded”.
Respondents aged 15 to 24 scored just 2.9 out of 5 in 2020, after scoring 3.4 in 2016. Respondents aged between 25 and 34 scored 3.6 in 2020, against 3.9 in 2016. Imagine now that the interest rate on your savings account was 1% per year and inflation was 2% per year. After one year, would you be able to buy more than today, exactly the same as today, or less than today with the money in this account?
Suppose that by the year 2024 your income has doubled, but the prices of all of the things you buy have also doubled. In 2024, will you be able to buy more than today, exactly the same as today, or less than today with your income?Mr Wilkins noted that the decline coincides with falling rates of high school students studying economics in Australia. The Reserve Bank of Australia found a “dramatic” 70 per cent decline in Year 12 Economics enrolments in the three years to 2020.
The 20-year-old student, who grew up chatting about economics and current affairs with her two journalist parents, worried that her generation had been inundated with products such as buy now, pay later that could make it harder to form good financial habits.She also believed young people faced significant barriers in getting into the housing market, but education on finances was lacking in schools.
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