Why is it that the financial literacy of Australia’s 15-year-olds is falling?

Australian schools were given access to the Government website MoneySmart in 2012, so why is it that the financial literacy of Australia’s 15-year-olds is falling?

In my experience, this site is a good place for anyone to start their research in educating themselves about their finances.

Findings from the Programme for International Student Assessment (PISA) by the Organisation for Economic Co-operation and Development (OECD) indicate how well prepared 15-year-olds from different countries are to meet life’s challenges, including financial literacy.

While currently, the financial literacy of Australian children may be on average slightly above the OECD average, the findings indicate that standards have dropped since 2012 and the current trend could mean that Aussie kids are left behind in future.

That said I believe it’s not just young Australians we need to be concerned about. A report released by ANZ in 2015 indicated that the majority of people say they feel in control of their financial situation all or most of the time and yet, so many Australians are ill prepared to fund their own retirement and most fail to even set a budget for spending.

Another report said 55 per cent of Australians believe that money is just a means to buy things and 48 per cent said dealing with money is stressful and overwhelming.

I believe if more parents chose to lead by example through educating themselves and doing research about money and investing this would go a long way to assisting their children.

What do we expect in the market?

This week the All Ordinaries Index (XAO) continued slightly lower towards the target zone set for the current decline to between 5600 and 5700 points. It’s possible for the market to continue the fall to around 5550 points as it tests support for the next rise towards the target zone of between 6200 to 6400 points.

As the XAO has fallen from resistance at around 5900 points, it will need to build strong buyer momentum over the coming months to break well above this level early in the second half of 2017.

The end of the financial year is fast approaching and this is typically when a number of property stocks go ex-dividend. Property stocks tend to pay at or above the market average, which is currently around 4.2 per cent. However, shares can fall by more than this amount following the ex-dividend date and therefore, a wise investor must consider this.

Dale Gillham is Chief Analyst at Wealth Within

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