The Australian government, through the Australian Securities and Investment Commission (ASIC) has created the National Financial Literacy Strategies that will run from 2014 to 2017. The main goal of this new strategy is to enhance the financial knowledge and skills of all Australians. As more Aussies face overwhelming amounts of debt, along with new lending schemes popping up everywhere, the government felt that now was the time to take action before things worsen.
What Is Financial Illiteracy?
The truth is that most people in Australia have a basic understanding of their finances and are quite able to take care of their day-to-day financial decision. Therefore, this does not make them financial illiterate. However, when it comes to saving for retirement, understanding their superannuation fund, and making sound investment decision, the line between financial literacy and illiteracy gets a little blurred. The problem is more that people do not have access to the right financial tools, rather than it is that they do not understand their finances.
What Is Included in the New Strategy?
To combat this problem the ASIC has developed a strategy designed to put more valuable tool and financial resources in the hands of the consumer. The program starts by implementing more educational teaching in the secondary schools as a means of preparing the next generation for the numerous financial decisions they will have to make in their life.
The second part of the strategy is to make more free and unbiased financial resources available to the consumers. From online sites to free financial counselling, the main object is to education consumers to make their own sound decisions. These resources will teach consumers everything from how to make a budget to how to choose the right loan, and from tips for buying a house for help avoiding common financial pitfalls.
The goals it to provide consumers with the financial knowledge and skills they need to make the most of their money and avoid financial problems. The program is receiving great reviews from business owners, employers, bankers, insurance companies, and more, who are all working together to help educate the public.
How Will this Strategy Affect You?
The main benefit for you personally is that you will be able to find more online financial support, as well as, direct financial support right in your local area. Hopefully, the strategy will force industries to work together to make understand their services easier. For example, banks can establish tools and resources that will make it easier for you to select the right type of loan to fit your budget, or insurance companies and provide uniform resource to help you select the right type of insurance coverage to meet your need.
The need for free and independent financial services is also in demand and the availability of these services will hopefully increase as this strategy progresses. This will allow you to seek professional advice before making any major financial decision and can help you avoid a financial catastrophe in the future.
Certainly, the availability of more financial tools and resource cannot be a bad thing. The trick will be to ensure people know where to find these trusted resource and learn how to use them wisely. More information will come in the next few years as this program starts to come together. If they can get businesses, education institutions, banks, governmental agencies, non-profit organizations and the consumers to all work together to provide the resource consumers need, it may just be enough to solve the financial literacy problem in Australia.
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