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Teaching and learning that builds financial capability is a relevant context through which schools can meet the objectives and requirements of the national curriculum.

Financial capability

What is financial capability? | Why teach financial capability? | Financially capable individual | Financial capability and enterprise 

Supporting learners to become confident, responsible, and capable in managing their finances can contribute towards:

  • achieving The New Zealand Curriculum vision for young people to be "confident, connected, actively involved, life-long learners" 
  • the graduate profile of Te Marautanga o Aotearoa, specifically that students are "able to contribute to and participate positively in the community" and "living successful and fulfilling lives."

A financially capable person is able to make informed judgments and effective decisions regarding the personal use and management of money. To do this they need:

  • an understanding of their own and others' values
  • knowledge and skills in managing money and income, setting goals, and planning ahead.

Developing financial capability is highlighted in The New Zealand Curriculum (p. 38, 2007) as an example of the type of theme that schools could use for effective cross-curricular teaching and learning programmes.

Te Marautanga o Aotearoa supports students to pursue quality choices, engage in lifelong learning, and actively contribute to New Zealand's social and economic development. The graduate profile describes students developing a wide range of life skills to enable them to develop a good work ethic, have quality career choices, use their initiative to be able to participate positively in society, contribute to the growth of the economy, and respect others.

Pasifika success will be characterised by demanding, vibrant, dynamic, successful Pasifika learners, secure and confident in their identities, languages and cultures through all curriculum areas such as the arts, sciences, technology, social sciences, and mathematics. This involves the deliberate and systematic use of a holistic approach and using existing communities, venues, and networks to access Pasifika parents, families, and learners to support their wellbeing and learning from beginning to end.

Pasifika Education Plan 2013–2017, p. 3

Financial capability is a relevant context for strengthening literacy and numeracy skills and understandings, developing the key competencies, and exploring values.

What is financial capability?

What is financial capability?
Terry Shubkin (CEO Young Enterprise Trust) and Pushpa Wood (Director, Financial Education and Research Centre, Massey University) explain how financial capability is made up of skills and behaviours enabling people to make responsible financial decisions. The process includes considering the impact on their personal life, their whānau/family, and the community.

“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, June 2012, p.7

“Financial literacy is knowledge and understanding of financial concepts and risks, and the skills, motivation and confidence to apply such knowledge and understanding in order to make effective decisions across a range of financial contexts, to improve the financial well-being of individuals and society, and to enable participation in economic life.”

PISA 2012 Financial Literacy Assessment Framework

Financial capability and financial literacy

New Zealand and international writers and organisations use the term “financial capability”, as referred to in The New Zealand Curriculum, more or less interchangeably with the term “financial literacy”.

BCUSS –Taking Part in Economic Communities

Why teach financial capability?

“The number and complexity of financial decisions that individuals have to make is increasing as a consequence of changes in the market and the economy.”

PISA 2012 Financial Literacy Assessment Framework

The 18–24 age group has one of the lowest levels of financial literacy in New Zealand. Those of school age are likely to be even less knowledgeable due to their dependent status, and lack of exposure to many aspects of financial decision making. Young people increasingly have to make decisions that involve finances earlier in life than previous generations had to.

Making good choices includes developing an understanding and appreciation of their own and others' values surrounding money and finances. Learning in this area builds on key competencies and explores important values.

What does a financially capable individual look like?

In becoming financially capable, students will develop:

  • knowledge and understanding of financial information and processes that have an impact on daily living
  • personal financial management competencies that enable sound decision making about financial activities
  • recognition and development of their personal values, which make it possible for them to achieve their personal goals
  • an awareness of others' values and priorities, which will enable them to participate meaningfully in the community.

"Staff, students, and community members were given opportunities to brainstorm ideas for what a financially-literate student will look like when they leave as a year 8 student. From these we devised our profile of a financially-literate student."

Mangere School story

The Ministry of Education’s intention to engage priority learners includes:

  • Five out of five Pasifika learners participating, engaging, and achieving in education, secure in their identities, languages, and cultures and contributing fully to Aotearoa New Zealand’s social, cultural, and economic well-being
  • Pasifika School leavers are academically and socially equipped to achieve their goals for further education, training, and/or employment.

(The Pasifika Education Plan 2013–2017)

Relationship between financial capability and enterprise

“Students can develop their financial capability as part of enterprise learning, but it is important to not confuse the two. Financial capability is primarily about management of money – earning, saving, spending, budgeting, sharing, setting financial goals, and managing risks – positioning students to make well-informed financial decisions throughout their lives. Enterprise learning seeks to develop entrepreneurs, and its valued outcomes include leadership, innovation, and risk taking.”

BCUSS - Taking Part in Economic Communities

The New Zealand Curriculum  (p. 39) includes “enterprise”, defined as “exploring what it is to be innovative and entrepreneurial”, as one of four future-focused issues that can connect or integrate different learning areas. Links between learning areas can be explored within “units of work or broad programmes” to “develop students’ financial capability.” Financial capability is a theme that can be used for cross-curricular teaching and learning. Using authentic learning contexts across different learning areas is a highly effective approach, which connects students’ life experiences with their learning at school. Making effective decisions or choices comes with understanding money and finances and being able to apply that knowledge in different situations.

Financial education is not a prerequisite for enterprising activities. Financial learning and enterprise learning can (and are best to) happen simultaneously – one context reinforcing the other.

Financial capabilities enhance students’ engagement in enterprise learning, and enterprise learning enhances students’ engagement in building their financial capability.

Teacher Meriane Brown facilitates her year 13 students’ learning about financial capability within the context of students setting up and running their own business over a year. Throughout the year students develop business knowledge, financial capability, and key competencies through teamwork, communication, problem solving, negotiation, and decision making.

Aorere College story

This diagram shows the relationship between financial capability and enterprise when included in a broader cross-curricular programme such as creating a business.

relationship between financial capability and enterprise.

View a text version of this diagram.

Published on: 20 Nov 2013