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Financial capability in New Zealand schools


Classroom shops.

There is a call for a greater focus on financial capability in schools. Many young people leave school with insufficient skills and knowledge to manage their finances at a time when they face more complex money decisions than ever before. 

But how do schools incorporate financial capability into an already crowded curriculum and how do teachers teach students about money when they might not be financially savvy themselves? 

This blog post explores five common questions about financial capability. It offers practical ideas and resources to help teachers integrate financial capability into their classroom curriculum so that students leave school with a healthy financial IQ.

What is financial capability? | Why teach financial capability? | How does financial capability fit the NZC? | What should be taught? | Where can I find support? 

What is financial capability?

The term financial capability refers to the ability to make informed judgements and effective decisions regarding the use and management of money.

A financially capable person understands financial concepts and risks, and has the skills and confidence to apply this knowledge to financial decision making.

Teaching financial capability requires a focus on skills, knowledge, and strategies that enable a person to make “well-informed financial decisions throughout their lives” (Ministry of Education, 2007).

The term “financial capability” is sometimes used interchangeably with the term “financial literacy”.

Why teach financial capability?

Financial capability is a core life skill
Today’s financial world is highly complex with our young people making important financial decisions at a much younger age than in previous generations. Financial capability is a core life skill for participating in modern society. 

Financial education is currently limited
Financial education in New Zealand schools today is limited. If you ask secondary school leavers where they learnt about money it is unlikely that they would attribute school. A 2009 report1 suggests that only 2% of 11-12 year olds and 8% of 16-18 year olds receive adequate financial education.

How Young New Zealanders Learn about Finance: A Longitudinal Study shows that:

  • young New Zealanders possess a relatively low level of financial knowledge compared to other countries
  • young people lack opportunities for formal financial education
  • parents remain the key source of informal financial education for young New Zealanders even though some parents’ own personal financial knowledge may be limited.  

Schools are the ideal channel for improving financial capability
A powerful way of improving New Zealanders’ financial capability is to include financial education in the compulsory schooling system. Romagnoli and Trifilidis (2013) argue that schools are the ideal channel for delivering financial education for the following reasons.

  • Young people have equal access to financial education.
  • Financial education is taught at a life stage when recipients are most receptive.
  • Schools offer organisational and logistical advantages.

In the past, the ad hoc approach to financial education has given rise to a spectrum of financial abilities across our population. If all students receive a quality financial education from an early age they will be able to make well-informed financial decisions throughout their lives.

How does financial capability fit The New Zealand Curriculum?

Curriculum document.

Financial capability aligns with the direction and intent of The New Zealand Curriculum (NZC) and it gets special mention as an example of the type of theme that schools could use for effective cross-curricular teaching and learning programmes (p. 39, 2007). 

Financial capability supports the NZC's vision by providing a context for students to become:

  • informed decision makers
  • financially literate and numerate
  • enterprising and entrepreneurial
  • contributors to the well-being of New Zealand.

Supporting students to become responsible, confident, and independent managers of money will enable them to live, learn, work, and contribute as active members of their communities.

Financial capability, as a cross curricular theme for learning, aligns with the NZC principles, especially coherence, future focus, and community engagement. It also enables students' development of the key competencies and exploration of the NZC values in relevant and meaningful ways. 

Financial capability is not an additional, stand alone subject. Rather, it is a theme for learning that can be integrated across all curriculum learning areas. Social sciences, maths, and English lend themselves particularly well to financial capability themed learning. 

>> Find more information about how financial capability links to the national curriculum 

What should be taught?

Financial capability progressions
The financial capability progressions set out suggested learning outcomes for financial capability across a range of learning areas. They have been developed to support New Zealand teachers with integrating financial capability across the school curriculum at all levels. The progressions are listed under the following three categories.

  • Managing money and income
  • Setting goals and planning ahead
  • Managing risk 

Teachers can use the progressions to assess students’ prior knowledge in financial capability and plan their next learning steps. The progressions can also be referred to during the planning process to help teachers incorporate financial capability into units of work. 

Financial capability and cultural values
Understanding how different cultural values affect financial decisions is an important part of financial capability. Some cultures may see money as a personal resource, others as a community resource. A successful financial capability programme will address these differences respectfully, without making assumptions about cultural beliefs.

Values that could be explored include:

  • sacrifice
  • fairness
  • charity
  • manaakitanga (hospitality)
  • whakawhanaungatanga (family or kin, shared responsibility, and collaboration).

Have you seen?

Taking Part in Economic Communities
This book from Building Conceptual Understandings in Social Sciences (BCUSS) explores ways to develop students' financial capability in the context of a social sciences learning programme. There is a strong focus on the relationship between cultural values and financial decision making. The resource includes three units of work that encourage students to understand that financial decisions, like economic decisions, are ultimately based on values and perspectives. 

Financial capability and enterprise
Students can develop financial capability while engaging in enterprise education. Enterprise education seeks to develop entrepreneurs, and its valued outcomes include leadership, innovation, and risk taking. Financial capabilities enhance students’ engagement in enterprise learning, and enterprise learning enhances students’ engagement in building their financial capability. 

School story

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

Where can I find more support?

Financial capability on NZC Online
NZC Online offers a comprehensive support section on financial capability. A selection of popular tools and resources from this section are described below:

Financial capability discussion tool
This tool is designed to support teachers and school leaders to:

  • understand what financial capability is
  • understand why it is important to teach financial capability 
  • plan for inclusion of financial capability in the school curriculum
  • learn how financial capability can be used as a learning context or theme to link learning areas across the New Zealand Curriculum.

You can select a question to find out more information and use the discussion tools with your students, staff, and wider school community to develop the teaching of financial capability in your school.

Resources for teachers
You can find links to a variety of resources to support financial capability including unit plans with an enterprise theme, school journal publications that explore financial capability, and a range of useful websites. 

Snapshot: Target Road School – Financial capability and whānau engagement
In this school snapshot, Christine Templeton, Deputy Principal of Target Road School, describes how and why they have drawn their community into learning about financial capability.

Mark your diaries ...

Money week
This resource page supports your school's involvement in Money Week. Money Week involves events all around the country to encourage New Zealanders to talk about money and develop greater financial capability. Led by the Commission For Financial Capability, Money Week offers schools a good opportunity to investigate all things financial. 

1. O'Connell, A. (2009). Financial Literacy in New Zealand. Retrieved from http://www.med.govt.nz/business/economic-development/pdf-docs-library/cmd-taskforce-research/financial-literacy-in-nz.pdf on 28 July 2013.