A Culture of Financial Literary (or lack thereof)

How do you feel about Australia’s financial literacy in Australia?

Financial Capability states 1 in 3 know the value of their super.

Investment Magazine states that 1 in 3 are aware their super has insurance.

MoneySmart states that half of Australia do not budget for their day to day expenses.

MoneySmart also discusses that almost half of Australia state that thinking about their long term financial wellbeing makes them uncomfortable and that almost 1 in 5 would not be able to deal with an unexpected financial expense.

There are some other alarming stats in the linked MoneySmart document.

Concerning stuff! What are your thoughts?

3 Likes

There is also a frightening stat around the fact that the vast majority couldn’t find $400 in an emergency…we’re pretty passionate about financial literacy - we want to build it into the product but there’s lots OUTSIDE the app we’re planning too…

4 Likes

Can’t wait to hear what you have planned…there needs to be change in everyday financial literacy. Xinja has a real opportunity to led change…

1 Like

I’m curious. What kind of change do you think would help financial literacy @Trevor_S? :thinking:

I’m open to criticism but financial literacy is my way become financially independent. I don’t want to have credit card debt and I don’t want to use ‘buy now pay later’ services. I want have funds available for emergencies and if I can’t afford to pay for something now, I’ll set up saving goals to buy when I can afford it.

The challenge I put to Xinja community: do you want to foster financial independence and growth?

Scott Pape’s work in the barefoot movement is an example of easy to understand financial concepts. How it can be applied in the ‘new’ neo banking movement is something for the Xinja community to think about. This open community is a gold mine for ideas :slight_smile:

For example, I used to spend with cash, saving loose change to deposit back into a savings account once the ‘jar’ was full. Now I’m using electronic transaction, there is no physical cash and utilise ‘round-up’ transfer to my savings account. Another example is instead of paying $10 for a lotto ticket, I’ll electronically transfer $10 from my personal account to my savings account. I Don’t fancy my chances winning lotto so I’ll save instead :slight_smile:

1 Like

Great points @Trevor_S! :ninja_emojis_blue_03:

I think financial literacy and financial independence work together.

The other question to ask is how do we get people to care about financial literacy? How do we get people to be more comfortable thinking about it? :thinking:

1 Like

It’s been said before but it needs to be taught in schools from an early age. I’m not talking about Dollarmites or any other bank trying to lock kids in early, but something in the actual syllabus.

We’re all taught skills most of us never use, but not life skills.

1 Like

Starting with ‘why’ is always important when looking to influence.

  1. Why does investing in my future matter?
  2. What happens if I don’t?
  3. What do I want to achieve?
  4. What do I need to achieve?

Questions like this can help many understand why being frugal or saving where possible matters today, rather than hitting retirement age and living a reduced lifestyle unexpectedly on the aged pension.

2 Likes

I agree. Just need people enthusiastic about growing savings and set achievable goals. For example, you might want to save $1000. It can be visual: when you make the first deposit into a savings account, it is the seed. Every time you save a little bit, the seed germinates and starts growing into a tree and once you have actives you’re goal, visually you can see a fully grown tree. Then you might want to change your goal to $2000., and every time you add to savings account, the tree continues to grow. You can be creative and have other visual cues to start savings.

1 Like

@brett I learnt compound interest in school but I’ll admit I don’t remember it very well :sweat_smile:

@Jax More great “Why?” questions. What are your thoughts on prompting people to ask these?

@Trevor_S A seed becoming a tree is a great visual to show growth. Are you suggesting this as a visual in an app? :_ninja_emojis_purple_02:

1 Like

@QuirkyXinja but did you learn what a bank account is, what a savings account is, why saving is important etc.

I don’t remember learning any of that…

1 Like

That’s my suggestion :slight_smile: you could use different formats to visualize growth and depending on what you are saving for.

1 Like

@brett not explicitly in school :thinking: I learnt about saving from my parents (one of them worked at a bank). Lucky to have had high school teachers who explained real-life scenarios like their own mortgages too.