![]() Between 20 men went from 4.1 to 4.0 and women went from 3.7 to 3.5. The Household, Income and Labour Dynamics in Australia survey has asked these questions and shows a decline in average correct answers. It includes the person’s knowledge of financial concepts, their ability to gather and sift through information and compare products, and their confidence in making decisions involving money.Īlthough the concept is broad, there is a set of five questions about interest rates, the stock market and mortgages that are regularly used to measure an individual’s level of financial literacy. It requires you to be competent in many aspects of the financial decision-making process. It includes lodging tax returns, managing superannuation and ensuring you have enough money to look after yourself and your family. Shutterstock What is financial literacy?įinancial literacy is a core life skill. Young Australians do not have good levels of financial literacy. ![]() The 2021 ANZ Financial Wellbeing Survey found that 18–24 year olds struggle with financial planning, choosing products, understanding online risks and credit-trap awareness. And students accrue significant amounts while studying – often in the tens of thousands of dollars. Universities rely on student fees as a substantial part of their funding. It can be argued universities have a moral obligation to build financial literacy skills and educate students about how course fees are charged and then repaid when they start working. On top of other generic skills learned at university, such as communication, collaboration, problem-solving and critical thinking, we need to add financial literacy. The accord review is looking at how universities can meet the knowledge and skills needs of the future. ![]() The Universities Accord is a prime opportunity to initiate this change. This is why universities should do more to help students better understand their HECS-HELP debt and make financial decisions in general. Guiding our young adult children to use this tool wisely sets them up for a lifetime of obedience and blessings, for themselves and for others.The repayments (which do not start until a certain income threshold is reached) impact disposable income and borrowing capacity and may negatively impact women disproportionately. Money has the potential to be a source of stress or a source of blessing in life. The Bible says that the borrower is the slave of the lender, and that includes Visa and American Express ( Proverbs 22:7). The sooner our kids develop an aversion to debt, the healthier their financial future will be. But it could end up costing twice as much as the original price. Sure, they can put that new cellphone on a credit card. ![]() Make sure your child understands the concept of interest. This encourages saving and emphasizes the importance of prioritizing expenses ( Proverbs 21:5). If they want to live in an apartment rather than the dorm, encourage them to save money to cover the difference in cost and any extra expenses. Financial goalsĮspecially when kids head to college, you may need to help them set a specific goal. Are those designer jeans really worth seven hours waiting tables? 3. ![]() Next time they see a stylish pair of pants, have them calculate the number of hours they have to work to pay for them. Helping our kids see their expenses in relation to the hours of work rather than just the amount can be a powerful tool for reining in spending. That first paycheck feels like a million dollars to a young adult who’s used to an allowance or babysitting money. Once our children understand this truth, they will have a firm foundation for the rest. In Malachi 3:10 and Proverbs 3:9, God challenges us to test Him to bless the 90 percent if we are faithful to give Him the first 10 percent. Giving the first 10 percent of their gross income, whether it’s a stipend, allowance, or paycheck, shows they trust God's provision, and helps them develop a healthy attitude toward the other 90 percent. Obedience to Godīy far the most important financial habit we can teach our children is tithing. Four Skills Young Adults Need to Manage Money Wisely 1. Besides teaching the basics of budgeting, there are four things parents can give their children to help them get a good start in a way that honors God. Even if we haven’t modeled good financial habits ourselves, we can help them avoid our mistakes. Often the freedom of college or a first job leads young adults to make poor financial decisions. God has given us parents the responsibility to train them wisely, and that includes money management ( Proverbs 22:6-8). The way our children handle money at the beginning of their financial life is critical to their well-being for the rest of their life. Few milestones reveal what our kids understand about money more than when they go off to college for the first time or earn that first paycheck. ![]()
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