Pre budget submission says financial literacy a circuit breaker out of generational cost-of-living crisis
- Call for a review of National Financial Literacy Strategy
- Better promotion of the benefits of financial literacy needed by industry and government
Independent financial analytics platform Your Financial Wellness says financial literacy needs a shake up in the upcoming Federal Budget to address generational cost-of-living challenges.
“Australians that have high levels of financial literacy make better decisions and have higher standards of wellbeing,” Your Financial Wellness Chief Executive Alex Hassall said.
“What we know is financial literacy isn’t just all about being the smartest person in the room.
“Our own research shows only 1 in 5 people are able to correctly answer 3 basic financial literacy questions, including university educated respondents.
“What we need is government to take up the opportunity while households are more focused on their living expenses right now and address an issue that has been forgotten for too long.
“There’s a role to be played by caring financial institutions interested in the long term wellbeing of their customers and governments interested in Australians making better and more informed financial decisions.
“We hope our sensible and modest suggestions are taken up in the Budget.”
Your Financial Wellness has made the following recommendations.
1. Financial Wellness Indicator – Establish a tested and consistent measure of financial wellness to ensure financial literacy objectives can be accurately and regularly measured by government.
2. Government led Promotion of Financial Literacy by partnering with Financial institutions who already have an existing relationship with their customers and have access to extensive resources, including financial experts and technology.
3. Review the National Financial Literacy Strategy to determine if it is ‘fit for purpose’ and create a Towards 2030 taskforce following a timely and targeted review.
4. Identify Financial Literacy Targets including women, 18-35’s and high school students to break the cycle of financial literacy issues being passed down through generations.
The 2023 Your Financial Wellness User Insights Report, found 43% of respondents reported high or overwhelming financial stress, reflecting a concerning increase from the 27% reported in 2021.
More than 60% sometimes worry about meeting normal monthly expenses, while around one-third of those surveyed say they often can’t afford to eat out or go to the movies.
The Your Financial Wellness platform collects data from thousands of Australians through partnered financial institutions, providing financial tips and assessments of financial goals, literacy, and status, including a unique financial wellness score that comes from measuring a range of underlying factors.
