While going through the education system in Australia one thing that always bothered me was there was virtually no education pertaining to how money works, investing and managing money. People like to paint the narrative that money isn’t that important, being happy is the most important. While yes, happiness is absolutely important I don’t think it is a mutually exclusive trade-off with money. The reality is money is extremely important, it is a reality we all have to do deal with and as a consequence, education pertaining to money should be paramount. The only formal education I received in high school was in year 12 which was economics, this provided a broader sense of how money works.
Fortunately for me I had always been interested in money and markets since a relatively young age, after graduating from high school I also studied finance and then eventually worked in the finance industry. During my time in the finance industry is when I really saw the effects of a lack of education with regards to money and investing. Generally there were three kinds of people:
Person A) A large income earner that had accumulated large amounts of debt on depreciating assets and had little savings due to excessive spending despite their large income.
Person B) A large income earner that had saved a substantial amount of money with no real investment in any asset class other than cash. They wanted to invest but had no idea what to do with their money and were generally conservative.
Person C) A low-middle income earner that had a moderate amount of savings and no real investment in any asset class.
While obviously no person is perfect, all three groups of people were lacking education around money in one way or another; whether that be spending, savings or investing. The issue is as we get older we are more reluctant to change our behaviour and thus are stuck in cycles. This leads to us being stuck in what seems a never-ending rat race. This rat race I think is extremely detrimental to mental health. Financial stress I have no doubt leads to anxiety and depression. As I saw from the three different groups of people, it didn’t matter how much money they made, they all had the same problem of getting to the ‘next level’.
For me, I believe that education around money is more important than a lot of content that is delivered in school. Without money, it’s impossible to function in society. As a consequence, the education system should start to educate accordingly. I do not expect high level content around investing but firstly as a primary school student we should be taught the importance of money and how it works. From High school onward, we can learn higher level content around investing and managing finances.
What was your experience with education and money?