Ever wondered what your financial literacy age would be? Or how your children are going navigating the consumer world?
Have a read through each age section to find you or your child’s financial literacy age. If you find yourself being unable to honestly say yes to a skill, then you now have the opportunity for financial self-improvement.
You may find that by increasing your financial literacy skills that you’ll be able to reach the point of financial sustainability earlier in life.
Wouldn’t it be great to have enough money so that work is optional. Check out the F.I.R.E. strategy for further information about financial sustainability.
For those following the Barefoot Investor once a week ‘money meal’ with children you’ll find the items listed below as a great resource for topics of discussion. For more information have a read of Kids Pocket Money: Barefoot Style.
You could even use this article as an age appropriate guide of where your child needs to be at regarding their financial knowledge and skills. If you find they are lacking in a topic, then you’ll have a fantastic parental teaching moment to show them an essential life skill.
All consumer and financial literacy skills are based on the National Consumer and Financial Literacy Framework.
Aged 8 Years
People with a financial literacy age of 8 years old have these skills:
- recognise Australian money: notes and coins
- understand that money is limited and comes from a variety of sources
- know that money can be saved
- understand that money is exchanged in return for goods and services
- know the difference between needs and wants
- use money to buy basic goods or services, for example – a chocolate bar
- have an awareness of earning money, spending, saving, paying bills, making donations
- compare the cost of similar items, such as the same Lego set at two different shops
- know that advertising can influence consumer choices
- understand how peer pressure can affect what you buy
Aged 10 Years
By 10 years of age financial literacy competence includes:
- knowing that saving money in a financial institution can earn interest
- understand why similar goods and services may vary in price
- be able to prioritise different needs and wants
- order and discuss reasons for spending preferences
- use money to buy basic goods and services
- know about options for paying for goods and services such as: cash, debit card, credit card and direct debit
- create simple budgets for specific purposes, such a food budget for a small children’s party
- accurately complete simple financial forms, including online transactions
- understand that advertising and peer pressure can affect what you buy
- explain the role of work in society and know the difference between paid and unpaid work
- understand the role of volunteers in the community to help those in financial need, such as feeding the homeless
- recognise that different countries use different currencies
Aged 12 Years
If you have the financial literacy skills of a 12 year old, you’ll be able to:
- describe how you can influence your income
- understand that income is used to meet regular financial commitments, and immediate and future expenses
- compare the cost of goods and services based on an identified need
- explain the benefits of saving for future needs and wants
- understand that money can be borrowed to meet needs and wants and that there may be a cost involved
- order and justify reasons for spending preferences
- use a range of methods and tools to keep financial records, for example: tracking pocket money
- create simple budgets for a range of purposes, such as planning an outing
- be aware of various payment options such as: cash, debit card, credit card, direct debit and PayPal
- accurately complete financial forms, including online transactions
- know about some of the rights and responsibilities of consumers and business, such as refunds
- be able to interpret information from invoice accounts, including information presented in a graph such as in electricity accounts
- know that advertising, marketing and social media can influence consumer decision-making
- recognise the value of unpaid work to the community
- recognise that the currencies of different countries have different values relative to the Australian dollar
Aged 14 Years
Financial literacy competence at 14 years of age includes:
- being able to track and verify transactions
- keeping financial records to manage income and expenses
- identify casual employment opportunities that can earn income
- be able to set and prioritise personal financial goals
- determine the value of ‘deals’ when purchasing goods and services such as ‘buy one, get one free’
- identify implications of ‘terms and conditions’ such as fees, penalties, interest and warranties
- be aware of the range of payment options such as: cash, debit card, credit card, direct debit, PayPal, BPay, Afterpay, pre-pay options, lay-by, phone and electronic funds transfer
- identify different forms of ‘credit’ and costs involved
- know where to find reliable information about the rights and responsibilities of consumers and businesses
- identify risks such as scams, identity theft, fraudulent transactions
- know how to do safe and secure online banking and shopping
- identify and take precautions to prevent identity theft and explain what to do if this happens
- access information to resolve consumer disputes
- have an awareness of advertising and social media being used to influence consumer decision-making
- convert from one currency to another
Aged 16 Years (end of Year 10)
For competence at 16 years of age, financial literacy skills and knowledge encompass:
- being able to manage personal finances
- creating simple budgets and financial records to achieve specific financial goals, now and in the future
- understanding a range of payment options: cash, debit card, credit card, direct debit, PayPal, BPay, Afterpay, pre-pay options, phone and electronic funds transfer
- being able to make financial decisions for significant life-stage events, such as saving for a car
- knowing about the different ways in which people are paid: wages, salaries, commissions, self-employment and government benefits
- identifying common terminology and categories for deductions used on payslips
- explain how over-reliance on credit can impact on future choices
- knowing the difference between ‘good’ and ‘bad’ debt, including manageability of debt and its long-term impact
- understanding why some goods and services are provided by Government for community benefit and how these are funded
- accurately complete and explain the purpose of a range of financial forms, including online transactions
- compare overall ‘value’ of a range of goods and services using comparison websites
- explain procedures for safe and secure online banking and shopping
- identify and take precautions to prevent identity theft and explain what to do if this happens to them
- know what to do to resolve consumer disputes
- be aware of marketing claims, for example in advertising and in social media, to influence consumers to purchase a range of goods and services.
- convert from one currency to another
What Does An Adult Need To Know To be Financially Literate?
Try one or all of these quizzes to find out if you are a financially literate adult:
How did you go on the quizzes?
Were you happy with your result?
Please share how you went below.