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What is financial capability?


“Financial literacy is defined as the ability to make informed judgments and effective decisions on the use and management of money. Being financially literate gives students choices, helps to protect them from unexpected events, and enables them to have a voice as consumers and citizens.”

Charting a course: A review of financial education in New Zealand, p. 7

Developing financial capability supports students/ākonga to:

  • participate in economic life
  • gain the knowledge, skills, and competencies to make good money management decisions across a range of financial contexts
  • improve the financial well-being of individuals and society.

Use these discussion tools with your teaching staff, senior management team, members of your department or syndicate or parents/whānau and members of your school community as you introduce or develop the teaching of financial capability in your school.

Discussion tools

Identifying financial capability skills and behaviours

Watch the videos

What is financial capability?
Terry Shubkin and Pushpa Wood explain how financial capability is made up of skills and behaviours that enable people to make responsible financial decisions. The process includes considering the impact of their decisions on their personal life, their whānau/family, and the community.

Financial capability in NZ schools
This video, produced by the Commission for Financial Capability, provides a window into financial literacy teaching and learning in some New Zealand schools.

Explore the information

List the skills and behaviours

List the skills and behaviours you think are important for students to develop financial capability.

Creating a profile of a financially-literate student

Read the school story

Mangere Central School facilitated discussions with staff, students, and the school community to devise a profile of what a financially-literate student looks like at year 8.

Read 'What does a financially capable individual look like?'


What knowledge, skills, and behaviours do you think your students/ākonga need to develop to make good financial decisions? (The content of this list will depend on the age of your students.)

Complete the list:

  • Understanding that money is used to exchange goods and services.
  • Ability to work out which of two items of different sizes would give better value for money, taking into account need and circumstance.
  • Understanding that money can be borrowed or lent, and the reasons for paying or receiving interest.
  • Knowing how to budget.
  • Understanding the importance of saving.
  • Understanding the concept of good and bad debt.

What are the needs of your students/ākonga, particularly your priority learners? How will building financial capability equip them to meet these learning needs?

What financial knowledge and understandings do your parents/whānau, students, and teachers see as important?

How is building financial capability addressed in your school vision? How is it addressed in your graduate profile?

Finding out about students’ prior knowledge of financial capability

Read the school stories

Mangere Central School conducted a workshop for teachers to identify content knowledge. This included teachers completing a personal finance education survey. Senior leaders planned a series of professional development workshops for staff.

Download the surveys

Discuss ways your school could you find out your teachers’, whānau/parents’, and students’ understanding of the nature of financial capability, and why it is important.

Use the tools from 'How do you engage whānau and community in developing financial capability?' as part of your discussion.

Published on: 01 Dec 2013