Often, by the time people have left school and begun work, their weak knowledge of money skills leads them to make poor decisions, or no decisions at all.
Early this year, Money magazine reported a Club Super poll of more than 500 people aged 18 to 36. Alarmingly, nearly 80% said they were not taught about super at school, and 60% had no education from their parents.
More recently, not-for-profit organisation Financial Basics Foundation surveyed 1,100 students from high schools around the country. More than half believed it would take less than three years to pay off a $2,000 credit card debt at the minimum 18% interest rate. In reality, it would take more than 15 years.
The Australian Securities and Investments Commission (ASIC) set up its MoneySmart website to help people increase their level of financial literacy. It includes features which assist teachers who want to carry out financial education in the classroom.
However, Dr Rakesh Gupta, senior lecturer in financial planning at Griffith University, does not believe this should be left to the schools alone. He told the ABC it was also important for parents to lead by example, showing good money sense in the home.
To achieve this, he offers five tips.
Plan your spending, so your child sees that you do not spend money that you do not have, by relying too much on the credit card.
Talk about money in a positive manner, so children don't just hear the negative things, like arguments about difficulties paying bills, or meeting expenses.
Help your child see that money is part of a transaction, a resource to help achieve goals, not a goal in itself.
Be realistic about the limits of financial knowledge, so they can understand not only how to manage resources well, but to know when they need help, from their parents or an expert.
Teach them financial literacy is important, because financial distress can be very harmful to their lifestyle, negatively affecting relationships and mental health, sometimes with long-term effects.
Dr Gupta said children should be introduced to the topic of financial literacy in primary school, “when they are able to read, write and count”.
ASIC's MoneySmart website, www.moneysmart.gov.au, has tips on how to teach children about money.
If you want to test your own financial literacy, you can try the Financial Basics high school test at www.abc.net.au/news/2017-08-17/financial-literacy-survey-quiz-test-yourself/8815272.