Around 8.5 million Australian adults lack basic financial literacy skills, which represents 45% of the adult population. The numbers for young people are even more concerning, with only 28% of teenage boys demonstrating financial literacy, compared with just 15% of teenage girls. According to the Household, Income and Labour Dynamics in Australia (HILDA) results from 2022, financial literacy levels have dropped across all demographics, with 15-to-24-year-olds at the lowest point. This decline has real consequences. 90% of young Australians aged 18 to 24 experienced financial difficulty in the past year, with 19% skipping meals and 22% going without medical care due to financial constraints. The question isn’t whether we need to act, but rather how we should respond to this growing crisis.
The Scope of the Problem
Australia’s performance in the OECD Programme for International Student Assessment (PISA) has declined since 2012, with no significant improvements in recent assessment cycles. More concerning, Australia did not participate in the 2022 PISA financial literacy component. Meanwhile, Australia’s National Financial Capability Strategy 2022 remains inactive and poorly defined as of 2023. This stands in stark contrast to global trends, where more than 70 nations, including most G20 members, are developing or implementing national financial literacy strategies. The current Australian National Curriculum does not recommend personal finance as a subject area. This gap disproportionately affects students from non-affluent households and creates additional barriers for disadvantaged young people.
Best Practice 1: Make Financial Literacy Mandatory
In the United States, 35 states now require personal finance courses for high school graduation, up from just 12 states two years ago, and the results demonstrate significant improvements in student financial competency. Ontario will require students from September 2025 to complete a mandatory financial literacy component within the Grade 10 mathematics curriculum, with a minimum passing grade of 70% needed for graduation. Australia needs a similar approach. Financial literacy should be a compulsory component of the curriculum, not an optional extra. Students should be required to demonstrate competency before graduation. This isn’t about adding more content. It’s about prioritising essential life skills.
Best Practice 2: Start Early and Build Progressively
The UK government introduced a new curriculum of 80 lessons for students aged 5 to 16, covering practical topics such as online spending, scam awareness and understanding financial documents. Starting early in a student’s educational journey is crucial for building strong financial literacy foundations. Financial concepts become more complex as students age, but the foundation needs to be built in primary school. A progressive approach allows students to develop skills incrementally rather than facing overwhelming information in high school. Key topics should be introduced progressively throughout a student’s education, including basic budgeting and saving in primary school, understanding bank accounts and digital payments in middle school, credit, debt and investment basics in high school and tax, superannuation and long-term planning during the senior years.
Best Practice 3: Address the Gender and Equity Gap
Girls and students from low socioeconomic backgrounds and regional locations are less likely to report that they feel they could do well in economics. This confidence gap perpetuates inequality. Financial literacy programs must actively work to close these gaps through several key strategies, including targeted support for female students through mentorship programs and role models in finance and economics, extra resources for schools in disadvantaged areas to ensure all students receive quality financial education regardless of their postcode and culturally responsive teaching that acknowledges different family backgrounds and financial contexts. The goal is to build confidence alongside competence, particularly for groups that have historically been underserved.
Best Practice 4: Make It Practical and Relevant
45% of Australians aged 18 to 24 felt unprepared to manage finances when they started working. This suggests a disconnect between what students learn and what they actually need. Financial literacy education must be grounded in real-world applications where students learn by doing, not just by listening. This includes creating actual budgets based on realistic scenarios, comparing real financial products and services, understanding payslips, tax returns and bills, navigating online banking and digital payment systems and recognising and avoiding scams and predatory lending. The rise of fintech tools and services makes these skills increasingly essential. Students need to understand how to use technology safely and effectively for financial management.
The Cost of Inaction
Low levels of financial literacy lead to lower savings, higher debt and increased wealth inequality. The impact extends beyond individuals to affect society as a whole. Over half (55%) of young Australians aged 15 to 19 are concerned about financial security, with financial stress linked to increased anxiety and depression. This mental health toll compounds the economic impact. As we grow older, financial literacy drops while confidence in making economic decisions rises, leading to potentially life-altering financial mistakes. The time to intervene is during the school years, when habits and knowledge can be built on a solid foundation.
Moving Forward
Australia needs an active, clearly defined national strategy that matches the approaches taken by our international peers. This strategy must include mandatory financial literacy education, progressive curriculum design, targeted equity initiatives and practical, relevant content. The evidence from other countries shows what’s possible. The question is whether Australia will act before another generation of young people enters adulthood unprepared for the financial realities they’ll face. The decline in financial literacy isn’t inevitable. With the right strategies, we can reverse this trend and equip Australian students with the skills they need to build secure financial futures.
