Aussie kids are working more than ever – but do they know what to do with the money?
According to official stats, Australian children are more likely than not to have jobs. A combination of lower junior wages and the proliferation of part-time opportunities in hospitality and retail now mean that thousands of under-18s are now balancing school, work and their personal lives. Of course, we’re not quite back to the glory days where most kids worked on the family farm instead of going to school*, but there’s a definite trend in place.
Labour force stats say that nearly 60% of 15-24 year olds have jobs. That’s not bad, when you consider that the labour force participation rate for the whole population is just over 64%, and that 64% of 15-24 year olds are also studying. Aussie youth also have it a bit better than others around the world, with youth unemployment at around 13%, compared to the OECD average of nearly 17%.
There’s just one problem with youngsters having this newfound financial independence. They don’t know what to do with the money.
Aussie kids falling behind
Research by different academics and NGOs has found that Aussie kids don’t really know how to handle the money they’re getting. The money comes in, but, for example, they use their income to get credit they can’t really afford, or they run out of money well short of pay day. It all comes down to their financial knowledge and decision-making abilities – a.k.a. financial literacy. For example, a 2014 study found that there are significant gaps in young people’s financial capability, especially when it comes to financial risk awareness and consumer rights awareness. Another older study found that over 60% of people aged 12-17 were in debt or had been in debt, and over half spent all the money they earned or were given in each week/fortnight/month.
The solution may not lie with schools or parents alone. The current Australian curriculum contains some financial literacy content at each year level, but if you look closely, it’s not a high priority and it’s more to do with applying numeracy to money than it is to broad capabilities around financial decision making. What’s more, teachers and critics already describe the curriculum as ‘overcrowded’. And whilst many parents do a great job teaching their kids about money, not all adults a) have the financial capability themselves, or b) know how to teach their kids about money.
Other stakeholders, both public and private, are stepping up and offering solutions. ASIC is doing it with their MoneySmart teaching resources for teachers who want to prioritise financial education. App developer Pennybox has created a comprehensive edutainment app for Aussie kids. Several banks offer educational resources, on top of traditional measures like school banking programs.
What we’re doing to fight the problem
Money101 is doing our part too. To celebrate the upcoming Global Money Week, we’re releasing three mini units for kids, and one for parents. They’re fully responsive, so they can be accessed and used on a computer, tablet or mobile. (EDIT 10/04/17: This offer ended 09/04/17. For more information about the content created by Money101 for Global Money Week, please contact us.)
In the future, the Money101 team looks forward to partnering with more clients to create amazing online education experiences that can really make a difference to Aussie kids’ financial capabilities. If you’re interested in working with us to create effective content for your client/customer base, get in touch with us today.
* Actually a joke. Money101 does not condone truancy. Stay in school, kids.