We have seen a major transformation in the structure of the Australian workforce over the past 25 years. Over one million lower skilled jobs have been replaced with higher skilled jobs in the knowledge and services sector. Employer now look for their staff to be more creative and critical in their thinking, better at communicating and presenting ideas, and be both digitally and financially literate.
The Foundation for Young Australians produced a recent report which compared the salaries offered between job adverts requiring these skills and those that didn’t and found a significant premium was being paid where these skills were demanded. Jobs requiring financial literacy were found to be paying a premium of $5,224.
Unfortunately for young Australians those under 35 are reportedly up to twice as likely as those over 35 to have a lower level of financial literacy with nearly one in four reporting to have difficulty understanding financial matters.
Over the past 25 years while we have seen the previously discussed change in the workforce the degree of complexity and number of financial products and services has also increased making financial literacy not only a skill valued by employers but also a requirement for a successful life.
Financial Literacy is slowly increasing in the focus of school curriculums but it remains a skill that is primarily learned from shared and personal experience. Unfortunately for many children it is reported that only 16% of households openly discuss finances with their children.
From talking with many people my understanding about why money is not discussed more comes down to two issues:
They do not feel comfortable discussing their finances
They do not fully understand their finances
As a financial adviser I spend my days discussing finances with my clients and I know that for some of them this is something they do not regularly do and do not necessarily feel comfortable with but over time it becomes more routine and easier to discuss. Discussing money can start small but the more open you are the better you and those you discuss it with will be.
If you do not fully understand finance the solution is quite easy, speak to a financial adviser. As a financial adviser I work with my client to ensure they are making the best financial decisions possible and have the knowledge behind them to confidently do so.
What can be known for sure is as we move forward the demand for financial literacy from employers will only increase and as financial products and services continue to evolve the need for personal financial literacy will also continue to grow.
If you have any questions about your own finances or where to start this conversation feel free to contact me for a personalised discussion.