Many high school students are struggling with financial literacy, especially students living in rural and regional areas, new University of Melbourne research has found.
Researcher Prof Ian Ramsay from the Melbourne Law School said the research showed concerning trends about the lack of skills in many young people regarding managing finances, saving and understanding financial risk.
“Young people are active participants in the economy. They have credit cards, bank accounts, disposable incomes, use mobile phones and have other expenses. However when they lack financial literacy, this can lead to poor decision making,” he said.
The average test score for all students across the board was 63%.
Metropolitan students were significantly more informed than their rural or regional counterparts, the research found.
Students who have parents in a professional job also scored higher than their peers.
“The financial literacy scores of students increased when there were open conversations with parents about money and financial issues.”
“We also found that boys scored, on average, slightly higher than females.”
“In addition, when we asked students to assess their own financial literacy abilities, they typically overestimated their abilities. Also, students who had a positive attitude to saving and learning about financial matters had higher scores.”
Of all the areas tested, the highest scores across the board were for financial decision making and financial language comprehension. The lowest areas included consumer rights awareness and knowledge about specific financial matters.
The research, which will be published later this year in the Company & Securities Law Journal, surveyed over 200 year 11 students as well as conducted focus groups. The research team was Prof Ian Ramsay Dr Paul Ali, Ms Cosima McRae and Dr Malcolm Anderson.
(Source: The University of Melbourne)