Maybe we should look at who benefits from it not being taught…
The reality is that all the banks make more money when the average Australian has been left in the dark financially and not aware of the dangers of paying too much interest on their debt. These sky-high interest costs chew up huge chunks of people’s incomes each and every month.
When I say people are in the dark financially, I mean no one’s taught about money as a subject every week in school, high school, or even university. The reality is you probably learned about money from your parents, and if they were great money managers, then you got a little bit of a leg up in life learning from their positive money management habits. But, if one or both of your parents weren’t a great money manager, then you probably inherited some of those not so great money habits yourself.
Australian kids are not learning how to increase their financial IQ around money, how to save it, make it and keep it. No one is learning how you should use a spending plan, how to best structure and manage your income so as to get it working harder for you, or how to get out of debt faster.
This lack of financial knowledge and teaching results in most Australians getting advice about money from the banks, who all benefit from you being in debt for as long as possible (30 years) so you pay them the most interest.
It’s kind of like getting nutrition advice from McDonald’s. I mean, they’re not in the game of getting you fit or healthy, and banks aren’t in the game of getting you debt-free. They’re there to make money for shareholders, CBA made $10,000,000,000 in profit this year after all of their expenses. That’s $10 billion. And that’s just one bank.
This is mind-blowing as it’s during a cost of living crisis, there is a huge amount of financial pain out there for everyday Australians, and many are struggling to make ends meet. They are having to cut back on expenses and are calling it tight, struggling just to make ends meet, and these guys at the CBA are still making $10,000 million a year!
By going back to the fundamentals of money and understanding it, I think the root cause of the lack of education about money is the schooling system. Why are people not being educated on how to spend, invest, and manage money? They’re guaranteed to have to deal with these things every single day of their adult lives.
How is it that we send a kid to school for 12 years and those kids are not being taught every week of that 12 years about money, management of money, budgeting, investments, tax, compound interest and being able to understand how to work out key numbers such as your Net Worth and Savings Rate?
Wealth should be a mandatory subject for all kids to learn daily in school to give them the best chance of success in life. One thing you can do as a parent to help change this in your family is to try and focus on giving them the education around wealth at home.
Helping them build their financial IQ by learning from you and quality educators online is going to be an investment that will reward them for decades to come.
