Is your teen developing the knowledge and skills needed to make good financial decisions throughout their life? Here are some great ideas to help your teen get into good financial habits.
What is ‘Financial Literacy’?
Financial literacy is an essential life skill. It means having the financial knowledge, skills and attitude needed to make good financial decisions. This includes learning how to budget and manage money, weighing up whether to save or spend, and deciding what to spend money on.
Financial literacy at school
Your teen’s school may use some of the great online resources that are now available to support the teaching of consumer and financial literacy. They’ve been developed by the Australian Curriculum, Assessment and Reporting Authority (ACARA) as part of the rollout of the Australian Curriculum, and help schools to incorporate topics like budgeting and consumer rights and responsibilities into maths, business and economics subjects. You can read more about them on the Curriculum Connections webpage. You can also find information on the Tax, Super + You website which is part of the Australian Tax Office School Education Program.
What you can do at home
Encourage your teen to build their financial knowledge by managing their own budget and saving up for things they want to buy. Having a budget will help your teen to get into good habits such as:
- Spending less than they earn – this is simple but essential for managing a budget.
- Knowing where their money goes – keep track of spending helps with saving.
- Having some savings for “rainy day” expenses – unexpected expenses are just that, unexpected!
- Planning for the future – think about future goals such as buying a car, travelling, moving out of home or undertaking further study.
Financial literacy skills are particularly important as your teen prepares for their post-school life, and learning to save money will help them to plan for the future. Saving doesn’t mean missing out on all the fun! There are many easy ways to reduce costs and save money, such as shopping around and comparing prices for everyday items, cooking at home and buying items second hand, such as text books.
There is a lot of great information online to help your teen understand financial systems and learn to manage their money. The Money Smart website includes information and tools that help with creating a budget and saving money, understanding how credit cards and loans work and learning about car insurance, tax and superannuation.
There are also some useful resources providing guidance on the first car, the first job, credit and debt, mobile phone ownership and moving out of home. These have been developed for teachers but also provide useful guidance for parents and families.