16 May 2011

Financial skills steer youth to positive futures

Financial literacy education improves the financial understanding and behaviour of young people at risk, according to a national report released by RMIT University, Mission Australia and ANZ.

Cover of Money Minded report

The 2010 MoneyMinded Summary Report.

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ANZ Group Head of Financial Inclusion and Capability Jane Nash; Parliamentary Secretary to the Treasurer, David Bradbury MP; ANZ Chief Executive Officer, Mike Smith; Mission Australia’s Urban Renewal Landscape and Construction program case worker, Brigitte House; and Mission Australia State Director – Victoria, Paul Bird at the report launch. Photo: Lisa Saad Photography.

The 2010 MoneyMinded Summary Report was launched in Melbourne by the Parliamentary Secretary to the Treasurer, David Bradbury, and ANZ Chief Executive Officer, Mike Smith.

Led by RMIT's Professor Roslyn Russell, from the School of Economics, Finance and Marketing, the report included a year-long study of more than 300 participants in Mission Australia's programs for young people at risk.

The report was the sixth annual evaluation undertaken by RMIT of ANZ's MoneyMinded, Australia's most widely used financial literacy program.

Professor Russell said the latest report included a case study of Mission Australia's Youth Financial Literacy Program, which used MoneyMinded to provide financial literacy training and support for at-risk youth.

"The case study evaluation indicated that scaled down, uncomplicated money management education is useful in providing a first step to a more sustainable lifestyle for young people," she said.

"There is growing evidence of a positive correlation between financial capability and psychological well being.

"But efforts to improve financial literacy should complement, rather than replace, regulation aimed at consumer protection.

"The development of financial literacy and capabilities is of most value when the efforts are accompanied by the broad availability of fair and affordable financial products."

The key findings from the evaluation of the Youth Financial Literacy Program were:

  • Simplified financial education increased young people's understanding and confidence in managing money and was important for their long-term wellbeing
  • Participants experienced a range of improvements with budgeting and reduced spending on items such as takeaway food, cigarettes or illicit drugs
  • Participants also showed greater understanding of the importance of shopping around for best price, increased willingness to seek help in times of financial stress, and improved saving and goal-setting behaviour

Mission Australia CEO, Toby Hall, said financial education played an important role in the various programs designed to transform the lives of young people at risk.

"The development of relevant financial skills empowered these young people to make positive choices that would significantly impact their adult lives," Mr Hall said.

ANZ CEO Mike Smith said MoneyMinded was a demonstration of ANZ's commitment to building financial capability, particularly in vulnerable communities.

Co-authors of the report were Damien Bailey and Lauren Wall, from the School of Economics, Finance and Marketing, and Professor Robert Brooks, from Monash University.

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