Barefoot Investor: Decision to ban school banking is a massive step forward

For far too long schools have outsourced the teaching of essential financial life skills to banks who have used it as an advertising play. But that stops now and the real education begins.

Getting banks out of our schools is a huge stride forward says Scott Pape. Picture: Nick Wilson/Foxtel.

I’ve been waiting to write this piece for years.

No, really.

My very first Barefoot Investor column 16 years ago campaigned for practical financial education to be taught in schools!

The Victorian Government’s decision to ban school banking, and replace it with practical, independent school-led programs is a massive step forward.

See, for far too long schools have outsourced teaching this essential life skill to banks.

And what have they done?

Well, they’ve mostly used it as an advertising play: signing up students as customers and putting them into their sophisticated marketing databases that spits out credit cards when the kid turns 18.

(And that’s when the real education begins!)

Truly teaching independent financial education in our schools — is so freaking important.

Let me be clear: having banks teach our kids about money is like having Ronald McDonald teach them about food nutrition.

Moreover the result is that our young people finish school scoring an ‘F’ for finances.

And as a result of that, they often go on to make really poor financial decisions. (ASIC research tells us that some of the most financially illiterate people in Australia are young people who have just left school.)

If I had a dollar for every deep-in-debt twenty-something who told me they ‘sucked at money’ or ‘weren’t good with numbers’, I’d have enough money to buy shoes.

Now, here’s the thing: you and I know that once your financial confidence is shot, it’s bloody hard to change. And once that belief takes hold, it ends up colouring your entire life.

In my work, I sit across the table from people who have made a lot of money mistakes.

And often there’s a frightened little kid that comes along with them.

And that is why the announcement from the Victorian State Government — to teach truly independent financial education in our schools — is so freaking important.

This is a very good day for every Victorian kid. Every Victorian parent. Every Victorian taxpayer.

After all, we all have a dog in this fight.

Creating financially confident young people will have positive long-term effects on our society, and our economy. Let’s hope the rest of the States are watching this, and taking notes.

Tread Your Own Path!