Make money skills a priority for schools and fit for purpose
We noted last week the need for improved financial education for kids. Now we look at what is in play. The good news is that a lot is happening. The challenge is to ensure it’s fit for purpose.
In 2018 Cognition Education found 16 financial capability programmes and 67 resources being offered to schools by banks, accounting firms and budgeting agencies, the Young Enterprise Trust, the Ministry of Education and the Commission for Financial Capability (CFFC).
The fact so many groups are contributing is fantastic. It also means a lot of collaboration is needed.
Programme for International Student Assessment (Pisa) tables rank countries’ education standards and, in 2012, financial literacy was added as a measure. New Zealand is slightly above the average of the participating countries. But that masks poor results for some groups such as Ma¯ ori and Pasifika.
In 2017 the government funded the CFFC $10m to create Sorted in Schools to improve outcomes – a 17th provider and yet another website, and it’s fair to say the approach rankled some.
Sorted in Schools got off to a wobbly start. It scored itself ‘‘not achieved’’ on four of five key measures and ‘‘partially achieved’’ for the last. The lack of visible progress was being contrasted by those already in the money education sector with the roll-out in 2016 of Banqer, a modern online education programme for schools.
Plaudits to the CFFC for their latest results exceeding targets. They recorded 35 per cent (a goal of 30 per cent) of schools teaching year 9 and 10 students had accessed one online resource.
If we are serious about giving kids money skills, central government will need to stump up and drive financial education expectations in curriculums, especially in lower decile schools.
My (Cameron’s) daughter had to take a language this year. Money skills was an option. It should be the other way around.
Are we future-focussed?
Creator of Banqer, Kendall Flutey, turned entrepreneurial and tech skills towards providing a quality and modern programme for schools.
With Banqer, students engage with each other online normalising their learning experience. They see the outcomes of core life skills such as budgeting, career and education options, hire-purchase or Kiwisaver. Banqer High will be launched this year expanding from their established primary school programme.
In contrast to Banqer’s gameplay style, Sorted in Schools is designed for teachers to deliver in a traditional format.
CFFC research tells us half of teachers see banks as a major source of financial learning for students, whereas only 11 per cent of students reported they had learnt a lot from banks.
Banks should be very active in this space. ASB and Kiwibank (via collaboration with Banqer) appear to be taking the financial education of kids seriously. Others should up their game.
When the nation has a debt burden that is 150 per cent of GDP, banks need to be taking a proactive stance as good corporate citizens.
Bank profits total just under $8 billion (pre-tax). The acid should go on them from society to up their dollar contribution to building financial skills among kids.
The Reserve Bank could throw its weight behind the issue too. A resilient financial system for generations to come needs financial nous among kids.
Is it hitting the mark?
About three-quarters of teachers believe school should be a major source of financial learning, while just 14 per cent of students said they learned a lot from school. Half said they learnt little or nothing from school.
Our research mirrors the UK, so it’s not a New Zealand thing. The same traditional education approaches are having the same outcomes.
We still treat financial education as an academic outcome. Money influences our wellbeing and societal pressures – housing, material items, stress and relationships. Being able to calculate compound interest is relevant for some, but understanding the concept, choices and consequences makes financial education a life skill.
School leaders and teachers see the importance of integrating financial education teaching across curriculum learning areas, and that this could be readily achieved. This contrasts with actual practice. The most common response (61 per cent) was that it occurs in one or two subject areas. Financial education should extend with a whole of school approach, not be domiciled into maths or commerce.
Modern learning tools like Banqer reduce the planning workload on teachers significantly, which can only benefit students. Banqer claims half of all primary schools are using it so they have something right.
Parents have a role to play but we know a lot of them make poor financial decisions. And when 70,000 adults sought support from budget advisory services last year, it’s naive to say parents are the solution.
There is an emerging class of middle-income poor in New Zealand too, with housing and living costs key culprits.
Poor financial management amplifies problems.
Through the lens of today’s students
It’s now 2020. Completing downloaded task sheets about compound interest or watching PowerPoint slides online is a hard way to engage young people about life skills and society. Imagine being a kid and getting told the next lesson was on financial literacy; sleep would beckon. This might be why half of kids say they learnt little or nothing about financial skills from school.
At the Building Financially Capable Communities conference in Auckland in December, Carly Sawatzki from Deakin University in Melbourne presented evidence of the correlation between maths and science achievements, and financial literacy.
She noted no evidence this impacts financial behaviour in the long term. Her message for educators was that for someone to be financially capable, they needed to be a capable person – personally and socially.
The results from Pisa 2012 show students who are proficient in financial literacy are likely to be proficient in reading and mathematics. Today’s kids are more aware of social and financial injustice. Financial education cannot be separated out into maths if we truly want to engage, be relevant and equip them to do better in life. Next week we’ll provide some suggestions on what we’d like to see.
Creator of Banqer, Kendall Flutey (right), turned entrepreneurial and tech skills towards providing a quality and modern programme for schools.