Financial literacy describes the knowledge, understanding, skills, dispositions and values to make informed, effective and responsible consumer and financial decisions.
The Australian Curriculum outlines this in the Curriculum connections: Consumer and financial literacy, and is a particular focus in the Mathematics, Humanities and Social Sciences, and Technologies learning areas.
There are strong links between financial literacy and numeracy. Being confident with number sense and understanding money makes it easier to make informed financial decisions.
PISA describes the thinking and behaviour that characterises financial literacy as:
‘Knowledge and understanding of financial concepts and risks, as well as the skills and attitudes to apply such knowledge and understanding in order to make effective decisions across a range of financial contexts.’
(PISA 2022)
PISA describes the purpose of developing financial literacy as:
‘To improve the financial wellbeing of individuals and society, and to enable participation in economic life.’
(PISA 2022)
In mathematics, these skills and understandings are particularly addressed and developed within content descriptors that apply mathematical modelling to financial contexts from Foundation to Year 10.
Being numerate is essential to:
- design a household budget
- plan a holiday
- choose a mortgage
- make sense of economic news and statistics
