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Students find financial literacy adds up

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With electronic banking being a part of life, and even many school canteens going cashless, few students get to regularly handle actual notes and coins. So do Australian school students lack basic budgeting and financial skills? According to the latest PISA financial literacy assessment, Australian students are actually ranked fifth best in the world.

As part of the OECD Programme for International Student Assessment (PISA), the financial literacy assessment measured 15-year-olds’ knowledge of personal finances and their ability to apply it to financial problems.

The students with the best average score came China, Belgium, Canada and the Russian Federation. While in fifth place Australian students were ranked significantly ahead of their counterparts in countries including the United States, Poland, Italy, Spain, Chile and Brazil.

However the overall score achieved by local students has declined since the first PISA financial literacy assessment was conducted in 2012. As financial literacy has been shown to be linked to overall mathematical and reading literacy, this result mirrors Australia’s overall decline in other PISA testing in science, reading and maths.

Put simply, high performers in mathematics and reading are also high performers in financial literacy. While low performers in mathematics and reading are also low performers in financial literacy. In addition, students in Australian metropolitan schools performed higher than those in provisional schools, who in turn performed better than those in remote schools.

Socioeconomic factors which are known to influence the overall performance of Indigenous students, were also prevalent here. These students scored an average of 411 points, which was lower than the OECD average of 489. While non-Indigenous students in Australia recorded an average score of 508.

This bears out the overall finding that the higher the level of a student’s socioeconomic background, the better the student’s performance in financial literacy. These results are useful in highlighting where funding for financial literacy education needs to be allocated, to help all students grow into adults who can take control of their financial future.

A total of 53 000 students from 15 countries and economies participated in the PISA assessment, including 14 530 Australian students from 758 schools. A more detailed PISA report can be read at http://research.acer.edu.au/ozpisa/27/

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