At just eight-years-old, my parents opened a savings account for me with the former State Savings Bank of Victoria. Among its myriad of financial interests, the bank targeted young people, forming a youth club to excite and encourage its members with the following ditty: “Spend some for fun, Save some too, that’s what good SSBs should do”. A powerful and pertinent message, it resonated with me so that nearly 60 years later, I can still recall it. Receiving my own personal bank book, I deposited very small amounts earned for chores-pocket money- undertaken at home, including making my bed every morning, dusting my bedroom and vacuuming the floor. Often, I helped my father clean the family car (there was only one) and rake the cut grass on the lawn of our garden.
My primary school had its own facility for SSB deposits, though I have no idea whether my friends used the service or even had individual accounts. The amount of money I accrued was invested in purchases such as new ribbons for my hair, some bright socks, books and even the odd 45 rpm pop song. As I entered adolescence, my chores increased as did my earnings, and at 13 when I started work during the school holidays, in a warehouse my uncle owned in which I folded imported Hong Kong underwear then placed them in cellophane bags and cardboard boxes for eight hours a day, five days a week, I embarked on a more detailed method of managing my money. In my diary, an ordinary exercise book, I listed clothes, shoes and handbags et al I wanted to buy and their cost, allowing me to budget accordingly and balance the books. I maintained this practice for many years.
My parents struggled financially to pay the bills with the lack of money a constant source of anger and frustration, especially vented by my father. However, while he occasionally lambasted me verbally for indulging my passion in purchasing varied clothing items he considered extravagant and unneeded, they were always bought with my own ‘saved’ money. Simultaneously, I felt aggrieved because he smoked which in my naive ignorance believed was a really gross waste of money. At least, I had clothes etc to wear repeatedly while his cigarettes just went up in smoke.
However, these experiences helped educate me about money per se; not just how you earn and spend it, but how it could enrich your life and how it could undermine it. Moreover, my mother who worked in retail and also smoked, invested some of her earnings in my education out of school hours, denying herself new fashionable apparel to treat me to classical music concerts, the theatre and even to the opera on one occasion to hear the great Dame Joan Sutherland, a truly momentous evening I have never forgotten.
My parents also paid for piano lessons they could hardly afford, learning and practising my skills for six years, still able to read music and appreciate it, and as much as I would love to sit down and play, sadly, I cannot afford to buy a piano. My collection of CDs compensate in some way.
Struggling to make ends meet over my life despite working and necessary budgeting as my earnings were miniscule, my early financial experiences helped me understand how important managing my financial affairs was throughout my life. On several occasions, unemployed and on the dole, it was virtually impossible to manage financially, though with help from my mother for the first time in my life as well as a few good friends, I coped, albeit in debt. Resuming work, I was able to pay my debtors back, and now, as I write this, I am a declared legal bankrupt. Maybe because I could no longer enjoy a reasonable quality of life on the pension being unemployed and in my early 60s, I stopped caring about living within my means. My mantra about life changed, recognising that while I was alive I didn’t care about what debts I accrued, particularly my MasterCard debt. Thinking I would obtain more gainful employment after retrenchment from my last job at nearly 58, I totally misjudged the impact of ageism, deciding to lodge a bankruptcy claim at 64 owing thousands on my credit card. Compared to the hundreds of millions owed by several leading businessmen reported in the media, my debt is extremely modest. Moreover, I can only ponder at why and how they amassed such megadebt.
Filing for bankruptcy was a good decision, one I considered for more than 12 months, now able to live on the age pension ensuring I eat well, enjoy myself albeit greatly proscribed, and able to pay my electricity and phone bills. Budgeting has taken on a new dimension and while I am in debt to a couple of ex-friends, I no longer worry about that, as they don’t need my money to maintain their lifestyles and the amounts are small.
Moreover, I still work, writing articles occasionally published and filling my coffers with extra money to buy some luxuries for my apartment and other needed appliances, managing my finances and accepting this is how I’ll live the rest of my life. However, I’m not the only one who couldn’t find $400-500 if a large appliance went bust; media reports revealed recently that thousands of people would also fail to finance a replacement, many of these people decades younger and employed. What are they doing with their money?
In this context, it was alarming to read recently in the media about an OECD test, funded by the Australian Securities and Investment Commission that illustrated Australian teens were becoming worse at managing money, girls however balancing budgets better than boys. The test of 15-year-olds’ financial literacy showed one in five students had slipped below ‘baseline’ standards, with numbers of low performers almost doubling between tests in 2012 and 2015.
The three-part assessment test quizzed students about:
• Pay slips,
• Insurance policies and
• Buying in bulk to save money.
The results revealed that students who discussed money with their parents and had a bank account- about 80 per cent fortunately- performed better.
Collingwood College, an alternative community school, includes lessons in financial literacy as does Ashwood High School which teaches money management through literacy and numeracy focus. However other test results, the latest Programme for International Student Assessment (PISA), illustrated that only about 15 per cent of students here were able to detect a scam financial email while only about 37 per cent can read a payslip. Comparing results with 15 other OECD countries, Australian students ranked equal fifth, worse than those in China, Belgium, Canada and Russia, but better than those in the US, Poland, Italy, Spain and Lithuania. Our score however has fallen from 526 in 2012 to an unspecified figure in media reports read in 2015, but the average is just 489. This declining score is in line with Australia’s falling maths, reading and science score revealed recently, too.
The Australian Council for Educational Research (ACER) recommended more schools introduce specialised financial literacy programs such as MoneySmart, a 2012 initiative by ASIC. The test results also showed students from low socio-economic backgrounds scored an average of just 107 with indigenous teens obtaining scores 97 points below non-indigenous. At Warracknabeal Secondary College business management teacher used the Foundation for Young Australians “$20 boss” program to teach senior students financial literacy.
Stats from the results revealed:
*67 per cent of students saved to buy things they wanted
*52 per cent worked outside of school hours
*30 per cent received pocket money without doing chores and
*37 per cent sold items online or at markets.
These results seem anomalous even contradictory in some ways as if 80 per cent have a bank account and the majority understand the need to ‘save’ to buy they are obviously able to manage money sufficiently when needed; moreover, as the majority also work outside school hours, it suggests they receive payslips and know, or certainly should know, exactly how much they earn even if they are ignorant about interpreting that payslip in all details. I know some payslips I received over my working life were different and clarifying exactly how my pay was calculated at times defied me.
The fact that girls balance budgets better than boys is indeed interesting, as women generally as I’ve perused in the press, are much poorer and financially worse off than males, suggesting perhaps that women with scant money may be far more aware of what their money can cover and how they can spend it, as if ‘necessity is the mother of invention.” Yet their lesser financial accounts as they age possibly subsumes they do not know or appreciate how to make their money work more lucratively. Maybe they are not that interested in the wheeling and dealing of business and making money per se as other articles I’ve read recently highlight a dearth of females studying economics at university and/or working as economists. I can only theorise about why: a lack of interest, motivation or just preoccupied with other more pertinent issues; I too in that category at school and at university. Money was never a priority on my agenda as a source of stimulation or success, more inspired by intellectual challenges for my mind and perceiving money as no more than intrinsic to a well-balanced quality of life but not an end in itself.
Indeed, it wasn’t until my mid- 20s that I appreciated how appallingly ignorant I was about basic economics, undertaking varied book reading and economic journalism to educate myself. Moreover, while I had a degree in politics, it seemed incredibly remiss not to include economics as integral in the course as how can you comprehend politics without knowing anything about economics. About fifteen years ago, watching Kerry O’Brien on the ABC-TV 7.30 Report discussing monetary and fiscal policy with Treasurer Peter Costello, I realised I couldn’t remember what they referred to. It was not the first time these policies had been mentioned in news broadcasts about the economy by diverse politicians and/or constantly written about in the press, but my reading of newspapers then skipped the business pages for other more relevant discourse. Without needing the information in my life on a daily basis, the knowledge acquired in my 20s stayed shrouded in my psyche somewhere.
Wanting to find out what these policies referred to without further delay, I made a few phone calls to my family. Firstly, I rang my middle sister, a politics teacher at a government secondary school who I thought would know, or at least should know, but didn’t. Asking her husband, also a teacher-librarian at a government secondary school, he didn’t know either. I then rang my oldest sister, a GP, who didn’t know either, nor my mother. The only person who knew was my doctor sister’s husband who had studied economics, was originally an accountant and who had a Masters BSc (Economics) from the LSE and was then a successful businessman earning megabucks. As soon as he told me my mind quickly retrieved the information but I was appalled at how university, so-called educated people in my own family, who had shelves of books in their homes, didn’t know. My disgust was even more pronounced when I confronted that voting was compulsory in this country and on what basis did people cast their vote, fiscal and monetary policies obviously irrelevant. Moreover, I was aghast my sister was teaching politics without knowing such basic and vital economics, a real travesty of our education system. How many other so-called educated people do not know? My mind boggles as I believe only a minority of over 18 years eligible voters could elucidate the difference and comprehend what they relate to and their ramifications.
With this background, the PISA results are not surprising as while parents may talk to their children about money matters involving saving, spending and its importance in living, the conversation would I believe ignore the big picture of economic understanding as it affects their lives. They would undoubtedly appreciate how much they earn and what they can afford to spend but as to analysing the why and how of managing their finances in a complex pecuniary environment most would shake their heads and say simplistically: “prices go up, my salary doesn’t increase accordingly”. That mantra has echoed across the western world engendering votes for people like Trump from the disadvantaged who believe as a rich man, Trump has the answers about how to provide them with jobs and make them more money. National fervour transcends the evil of globalisation without these people having any idea what’s dismissed by the former and encompassed by the latter. At least I have been reading economic reports in the media, watching business news on TV and trying to comprehend it since the GFC in 2008.
The PISA financial literacy results reveal how important the introduction of basic economics in primary schools should be; as vital as the 3Rs as money is integral to life. As much as I may have failed to recognise its real relevance in my youth, I certainly appreciated that I must balance my budget and at the same time however, am also glad it wasn’t the focus of my life. So many people who make money their goal to lavish financial profits on their children and other material accoutrements are just as ‘empty’ as those who don’t have much money either, too often money the measure of what matters in life.
Writing this now, sports news is dominated by both AFL footballers and Australian international cricketers campaigning for much more money and while what they earn pales in comparison to the megamillions earned in British and European soccer-$73m for one soccer player in England- I can only wonder in amazement at how much people want to earn to achieve a really comfortable, satisfying and enjoyable life. I would love to have a few million to make the movies I want, publish the books I write and start my own hard copy magazine as well as provide funds for medical and social research and foundations genuinely engaged in alleviating poverty and hardship around the world. At times I still struggle to pay my bills, have to forego dinner at even inexpensive restaurants, drink cheap red wine and miss lots of concerts, movies and dance events I would love to attend. I haven’t travelled overseas for almost 30 years.
My impecunious finances now reflect miserly earnings during my employment years, yet I accept that outcome as based on my choices because making money per se was not top priority in my life. I have no regrets about that, my life so enriched by conversations with a great array of interesting people from all walks of life and from different ethnic and national backgrounds I encountered travelling to other countries in my youth and indeed, around my home environs over the past three decades.
Balancing the budget is not just about dollars and cents but also encompasses balancing lifestyle choices and recognising what is actually worth investing in for self. My choice of investments are different from most others I realised many decades ago, as I still smoke though much reduced from bygone years, buy the odd piece of clothing from recycle shops and shout myself to a strong latte every morning in my locality. I also buy healthy food and eat well; a top priority in my life; albeit embellished by a sweet donut after dinner. Some indulgences are fortunately cheap.
What people need competency in is not just interpreting a pay slip or creating an invoice, but developing an appreciation of that old cliché: money doesn’t buy happiness, at least not intrinsically; necessary to live rather than just survive, but having megabucks is no guarantee of calm contentment out there in suburbia. Contrarily, having no money to pay bills for essential utilities, or to live in a safe and secure abode and buy healthy food also incites its own angst, stress and frustration. Balance and understanding about how much one needs to ensure some enjoyable quality of life is what’s demanded. Call me old-fashioned, but that includes sharing genuine love with others (not some glib, disingenuous lip service adherence) which offers greater rewards than a million-dollar bank account. Sometimes both are hard to achieve. Money matters but how much and for what?