The Financial Literacy of Young Australians: An Empirical Study and Implications for Consumer Protection and ASIC's National Financial Literacy Strategy
Company and Securities Law Journal, Vol. 32, No. 5, pp. 334-352, 2014
19 Pages Posted: 3 Sep 2014
Date Written: September 1, 2014
The Australian Securities and Investments Commission (ASIC) has stewarded the Australian National Financial Literacy Strategy since 2011. Financial literacy is increasingly recognised as an essential part of consumer protection, complementing traditional consumer protection mechanisms such as disclosure. Increased financial literacy has significant benefits including the potential to reduce the need for regulatory intervention and enhance economic participation. While much attention has focused upon the financial literacy of adults, young people are active consumers and it has been suggested that their levels of financial literacy are not consistent with their extensive consumer activities. Currently a research gap exists regarding the financial literacy levels and attitudinal/behavioural aspects of young people’s financial decision-making. This article discusses the results of a financial literacy survey of senior students in Australian secondary schools. The survey tested six key areas of financial literacy skills - financial decision-making; financial language comprehension; formal financial literacy (measuring the ability to conduct basic calculations and using practical skills to determine correct answers); financial knowledge comprehension (measuring awareness of matters such as investing and the classification of job types); consumer rights awareness; and financial risk awareness. The analyses tested for demographic factors and attitudes that are related to financial literacy. The study contributes important findings that can assist ASIC’s ongoing work promoting consumer protection through financial literacy policies and can also assist in the development of financial literacy education programs in schools.
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