Financial Literacy

Policy

This policy outlines the requirements for the delivery of financial literacy education in Victorian government schools.

Summary

• Every Victorian government school must deliver financial literacy education as part of the Victorian Curriculum through the Economics and Business and Mathematics learning areas.
• Victorian government schools cannot provide a School Banking Program from an Authorised Deposit-taking Institution (ADI), such as a bank, credit union or building society.
• Victorian government schools are also prohibited from:
  • allowing an ADI to deliver any other form of financial literacy education to their students
  • using learning and teaching resources created by an ADI to provide financial literacy education to students.

Details

Under the minimum standards for school registration, every Victorian government school must deliver financial literacy education as part of the Victorian Curriculum, specifically:

• in the Economics and Business learning area (Levels 5-10), through the ‘Consumer and Financial Literacy’ strand
• in the Mathematics learning area (Levels F-10) through the ‘Number and Algebra’ strand, which has a sub-strand called ‘Money and financial mathematics’.

Victorian government schools cannot provide a School Banking Program from an Authorised Deposit-taking Institution (ADI) such as a bank, credit union or building society.

Victorian government schools are also prohibited from:

• allowing an ADI to deliver any other form of financial literacy education to their students, including via face-to face, virtual or blended delivery modes
• using learning and teaching resources (for example, apps, worksheets, videos) created by an ADI for the purpose of providing financial literacy education to students.

Further restrictions on School Banking Programs in Victorian government schools can be found in the Department's Sponsorship policy.

Further information on financial literacy — what it is, why it is important and considerations for teaching it, is available on the Guidance tab.

Resources for school leaders to assist with the implementation of this policy and its communication to the wider school community are available on the Resources tab.

New teaching and learning resources have been curated and developed in consultation with financial experts and the Victorian Student Representative Council to assist with the strengthening of financial literacy education in Victorian government schools. These resources can be accessed through the Resource tab.

Schools who require additional support in disengaging from a School Banking Program can contact the Learning Design and Innovation Unit on 7022 2364 or learning.design.innovation@education.vic.gov.au

Definitions

Authorised Deposit-taking Institutions (ADI)
ADIs are institutions like banks, credit unions, building societies and other mutual organisations that offer deposit products in Australia. ADIs are supervised by the Australian Prudential Regulation Authority (APRA) and must comply with the Corporations Act 2001.

School Banking Programs (SBPs)
SBPs are programs where an ADI offers deposit products to the students at a school; these students are encouraged to establish bank accounts and make ongoing deposits into those accounts at the school.

Related policies

• Curriculum Programs Foundation to 10
• Sponsorship

Guidance on delivering financial literacy education

What is financial literacy?

Financial literacy is an essential life skill which is defined as ‘the process by which financial consumers improve their understanding of financial products, concepts and risks including where and how to access help or take the necessary actions to improve their financial well-being’ (Organisation for Economic Co-operation and Development (OECD), 2005). A quality financial literacy education provides students with the knowledge, skills and understandings necessary to:

• make informed decisions about personal consumer and financial choices such as learning why saving is important and how to save, comparing prices of products and services, making good purchase decisions despite strong marketing influences, understanding consumer law and rights, standards, and product safety
• understand how their consumer and financial decisions affect other individuals, the broader community, and the natural, economic, and business environment
• learn how to manage financial risks and rewards, avoid identity theft and scams, manage assets, and protect their finances through insurance, savings, and superannuation etc.
• calculate best buys, solve problems involving profit and loss, and calculate simple and compound interests.

Why is quality financial literacy education in schools important?

The imperative to teach students about financial literacy is supported by:

• the Foundation for Young Australians (FYA) New Work Order report (2015) which found that approximately 33% of students are not financially literate
• the Program for International Student Assessment (PISA) Financial Literacy 2018 (latest) national data which showed that the financial literacy performance of Australian students has declined since 2012
• the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry (2017-2019) report which found that 46% of Australians aged 15 to 75 struggle to understand simple financial documents
• OECD (2014) findings that show low levels of financial literacy impact negatively on standards of living, psychological and physical wellbeing and lead to an increased reliance on government support
• a Consumer Policy Research Centre (2020) study which shows that young Australians have been left more financially vulnerable as a result of COVID-19, with many taking out personal loans, borrowing from family, missing bill payments and seeking payment assistance.

Through the Victorian Student Representative Council (VicSRC), Victorian students themselves have called for more robust financial literacy education in schools, saying that they feel inadequately prepared for everyday financial situations such as managing personal finances and completing a tax return. For example, in the 2019 VicSRC Student Congress, students called for more education about banking, budgeting, savings, avoiding debt, understanding loans, and calculating taxes.

Financial literacy in the Victorian Curriculum

Financial literacy is part of the Victorian Curriculum Foundation to Level 10. It is taught through the Economics and Business (‘Consumer and financial literacy’ strand) and Mathematics (through a sub-strand called ‘Money and financial mathematics) learning areas. The ‘Consumer and financial literacy’ strand focuses on responsible consumer and financial decision-making at both the individual and community level. Students consider how everyday financial choices made now can affect future financial stability as well as the impact of the Australian and global financial landscape on economic stability. For more information, refer to the Victorian Curriculum F–10 search: Economics and Business.

The ‘Money and financial mathematics sub-strand’ provides students with the knowledge, understandings and skills necessary to make everyday financial decisions. At Foundation to Level 6, student learning is focused on understanding money, creating simple financial plans and calculating percentages to assist them to make informed purchasing choices. At secondary level, students develop the mathematical skills necessary to make sound consumer choices, calculate profit and loss margins and understand simple and compound interests. For more information, refer to the Victorian Curriculum F–10 search: Mathematics.

Considerations for teaching financial literacy

Financial literacy in Economics and Business should be taught through local, Australian and international issues, events and case studies. The ‘Consumer and financial literacy’ strand should not be taught on its own — it should instead be integrated with other Economics and Business strands and, where relevant, other learning areas (for example, Mathematics, Geography) and capabilities (for example, Ethical, Personal and Social). Research suggests that scenario-based/applied learning/‘real world’ problem solving foci in student learning experiences are most likely to support learning progress. Scaffolding understanding and use of explicit academic vocabulary for Economics and Business is also recommended, as is positioning students to consider options, consequences and the wider implications of decision making (for example, legal, social, environmental, political).

Financial literacy in Mathematics should be taught through practical financial problems. Such problems provide meaningful contexts for students to apply mathematical concepts such as place value, mathematical operations, efficient strategies for calculating, reasoning and problem solving. Research suggests that when financial literacy tasks are embedded in mathematics lessons, students are more likely to use mathematics as a tool to consider broader social, ethical, and economic issues. Teachers should note that home and community experiences will strongly influence student knowledge, beliefs and attitudes to money.

References

• Commonwealth of Australia (2019). Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. Retrieved from: Final Report - Volume 1 ( royalcommission.gov.au)
• Consumer Policy Research Centre (2020). Young people wading into a sea of debt as they bear the brunt of COVID-19. Retrieved from: Young people wading into a sea of debt as they bear the brunt of COVID-19 - CPRC, Foundation for Young Australians (2015). The New Work Order. Retrieved from: fya-future-of-work-report-final-lr.pdf
• OECD (2005). Recommendation on Principles and Good Practices for Financial Education and Awareness. Retrieved from: https://www.oecd.org/daf/fin/financial-education/35108560.pdf
• OECD (2014). PISA 2012 Results: Students and Money: Financial Literacy Skills for the 21st Century (Volume VI), PISA, OECD Publishing. Retrieved from: www.oecd.org/pisa/keyfindings/pisa-2012-results-volume-vi.pdf
• OECD (2020). PISA 2018 Results (Volume IV): Are Students Smart about Money? PISA, OECD Publishing, Paris. Retrieved from: https://doi.org/10.1787/48ebd1ba-en
• OECD. (2020). Many 15-year-olds- struggle with financial literacy, OECD Pisa report finds. Retrieved from: http://www.oecd.org/finance/many-15-year-olds-struggle-with-financial-literacy-according-to-oecd-pisa-report.htm
• VCAA (n.d.) Victorian Curriculum Foundation – 10. Retrieved from: https://victoriancurriculum.vcaa.vic.edu.au/

Resources

Policy implementation

Resources for school leaders to support implementation and change management:

• Frequently Asked Questions document for regions/school leaders (DOCX)
• Frequently Asked Questions document for parents/carers (DOCX)
• Sample text for use in a school newsletter (DOCX)
• Fact sheet on the importance of quality financial literacy education (DOCX) — for use with school communities.

Strengthening financial literacy education in schools

New financial literacy teaching and learning resources are available on the FUSE platform. These resources have been developed in consultation with financial experts and the Victorian Student Representative Council.

Practical financial literacy skills — hosts resources that focus on topics students identified as most useful to them in their everyday lives, including:

• understanding money and budgeting
• making sound financial decisions
• identifying financial scams
• calculating interest and tax
• understanding consumer rights.

Financial literacy in the Victorian Curriculum: Economics and Business — supports the teaching of financial literacy within the Economics and Business learning area. This includes:

• sample units of work developed by the Victorian Curriculum and Assessment Authority
• MoneySmart Teaching Program resources developed by the Australian Securities and Investment Commission
• resources developed by other financial or education experts such as the Australian Taxation Office, ABC Education and Consumer Affairs Victoria
• links to professional learning opportunities, case studies and research.