Should Financial Capability be
Taught in Schools or at Home?
Introduction
Financial capability refers to making informed decisions about personal finances, including
budgeting, saving, investing, and managing debt (Lučić, A., Barbić, D., & Uzelac, M., 2023).
This essay focuses on whether financial capability should be taught in schools or at home.
School-based education advocates formal instruction to ensure that all students gain
essential financial skills regardless of their background. Meanwhile, those in favour of
home-based education claim that parents can provide more personalised financial lessons
based on family values and experiences. This essay argues that financial capability should
primarily be taught in schools as schools provide universal access to structured financial
education, ensuring consistency and standardisation. Additionally, research highlights the
long-term benefits of early financial education on adult financial behaviours (Kaiser et al.,
2022). Schools are also better equipped to address issues of equity, offering free resources
and reaching underprivileged students (Guimaraes & Faria, 2015). In summary, formal
education systems are in the best position to prepare young people for future financial
challenges.
Why Should Financial Capability Be Taught?
Financial capability is important for the economy because it directly affects resource
allocation, investment decisions of individuals, and overall spending habits which all directly
influence the economy (Bunyamin, M., & Abdul Wahab, N., 2022). Financial capability
impacts individuals in aspects of saving money, spending money, making budgets, managing
personal debt, what form of debt they should take, and where to invest their money. This
study highlights how many Kiwis understand the importance of financial capability and
understand some of the financial issues they encounter but do not know how to overcome
these financial challenges (Widdowson & Hailwood, 2007). With New Zealand’s (NZ) current
economy, there is a clear sign that more financial capability in schools is needed.
A 2015 NZ report surveying 2,646 students and 196 teachers agreed that financial capability
matters and that it needs to be more standardised in the NZ education curriculum (New
Zealand Council for Educational Research, 2015). The report found that 99% of teachers
believe financial capability is important and 77% of teachers believe students’ financial
capability skills are low. Additionally, 51% of students had little to no financial education in
schools but 88% of students have bank accounts. This further reinforces the need for
financial capability to be taught in schools as young Kiwis who possess money do not know
how to manage it.
Key Argument / Point 1: Schools Provide Universal Access
Schools provide universal access to students through a strict curriculum to ensure all
students get the same and fair education (Ministry of Education, n.d.). Furthermore, by
enforcing schools to start teaching financial capability as a normal subject similar to science,
English, maths, etc., students will be equipped with more skills to help them manage their
finances in the real world (Batty et al., 2015). New Zealand has historically been moving
towards a better education system and providing better access to education regardless of
income and race (Mitchell, 2010). Furthermore, there has been a shift towards inclusive
education, reflecting the global belief that all children have the right to be educated in their
local schools. The 2020 Education and Training Act reinforces the support given to students
to receive a fair and equitable education in NZ (Ministry of Education, 2020). Fair education
may not be something all parents can supply to their children when conducting home
learning due to time constraints, knowledge constraints, and financial constraints.
Sorted NZ provides Kiwis with tools for budgeting, retirement planning, debt management,
and saving (Who’s, n.d). In March 2019, they launched Sorted in Schools, Te whai hua – kia
ora, aimed at equipping teens with financial capability. Government-funded and free for all
NZ secondary schools, the program offers teacher-designed courses available in both
English and Māori (About Us, n.d). By offering free resources for NCEA levels 1 to 3, Sorted
NZ ensures that all students and teachers have access to fair financial education
(Resources, n.d). They have made great progress for easy integration with their internal and
external assignments under the current NCEA curriculum and overall should be integrated
more.
An example of a successful program is the integration of financial studies in schools in
Japan. The integration has shown a successful outcome with students being able to learn
age-appropriate subjects such as budgeting or financial planning (Y. Kim, 2023).
Furthermore, Japanese students demonstrated higher financial capability compared to NZ
students showing that there is an overall need for standardised financial learning (M.
Cameron et al., 2013). With the program being a successful integration, NZ should follow
this as an example of how to implement financial studies as a standardised subject ensuring
all students get the same and fair education.
Key Argument / Point 2: Long-Term Impact of Early
Financial Education
Teaching young people financial capability positively impacts their future money
management. A 2022 study (Zhang & Fan) examined the relationship between financial
education and student loan outcomes in the USA. It found that students with minimal
financial education faced higher debt, increased stress, and lower satisfaction, while those
who received financial training reported greater satisfaction, lower debt, and reduced stress.
Notably, students with more financial knowledge exhibited lower delinquency rates,
suggesting a connection between financial education and reduced criminal involvement.
Additional research shows that students who learn about finance make better purchasing
decisions, rely less on expensive credit, are more likely to own microenterprises, accumulate
more assets, incur less debt, and maintain this knowledge for over a year (Bernheim et al.,
1997; Bruhn et al., 2022; Frisancho, 2022; Romagnoli & Trifilidis, 2013). Overall, financial
education consistently proves beneficial throughout students' adult lives.
Research shows that financial education programmes can improve financial knowledge and
behaviours among students across grade levels. High school students showed increased
financial knowledge after participating in dedicated curricula, with effects lasting over time
(Walstad et al., 2010; Bover et al., 2018). These programmes also positively influenced
students' involvement in financial matters at home and their patience in saving (Bover et al.,
2018). Younger students, such as fourth and fifth graders, experienced lasting knowledge
gains and improved attitudes towards personal finance, increasing their likelihood of saving
(Batty et al., 2015). Similarly, teens demonstrated significant changes in financial knowledge,
behaviour, and self-confidence both immediately after and three months following curriculum
completion (Danes et al., 1999). These international studies suggest that well-designed
financial education programmes effectively improve financial capability across age groups.
This highlights how learning in schools has a long-lasting effect. As early financial education
is not widely integrated in New Zealand, Sorted in Schools could prove to be a successful
programme with lasting benefits for students.
A 2021 financial capability report that surveyed Kiwis concluded that among other groups
younger people need more help as they lack an understanding of financial capability
components such as spending restraint, informed product choice and knowledge of money
management (Te Ara Ahunga Ora Retirement Commission, 2021). By teaching young Kiwis
basic financial capability, the number of overall Kiwis who have financial troubles can be
reduced as they carry and retain the information they learn as a student.
Counter Argument: Why Should Financial Capability Be
Taught At Home?
Teaching financial capability at home tailors education to individual financial behaviours.
Parents pass down practical habits, such as paying bills on time and careful purchasing,
through direct and indirect socialisation. Research shows that parental involvement is key to
short-term financial behaviours in adulthood, promoting self-control and careful spending
(Yeh, 2023). Parental financial socialisation significantly improves financial capability and
decision-making (Grohmann et al., 2015). Shim et al. (2009) found that young adults who
learned financial management at home were more likely to budget, save, and avoid debt,
with family influence outweighing formal education.
Teaching financial capability at home allows for more applied learning than theory-based
school lessons. Parents can involve children in financial decisions like grocery shopping,
budgeting, managing bills, and integrating cultural values, offering practical applications
schools cannot replicate. Gudmunson & Danes (2011) note that parental influence is a
continuous process, shaping children's financial attitudes and behaviours more effectively
than school programs.
Critique of School-Based Financial Education
Finance currently is not a compulsory subject for students to learn (For parents and
whānau., 2022). However, in 2023 Labour Party and National Party announced that finance
will be compulsory for students to learn (LabourVoices, 2023; 1 News, 2023). Additionally,
that same Labour Party announcement recognises that graduating students are not
equipped with enough skills to help them manage money or manage debt. The need for
more financial education is further strengthened by Widdowson & Hailwood (2007), who
states “Although these and other initiatives, including those promoted by many private-sector
entities, are all helping to promote financial literacy in New Zealand, there is a
widely-recognised need for further measures to strengthen financial literacy and capability
among the general public.” The need to improve financial literacy among students and adults
alike is evident.
Another critique of school-based learning is some teachers may lack the skills to teach
students with disabilities. Even with the support of teaching assistants, if aides do not
understand the material, they may hinder the student's learning rather than help (Rutherford,
2012). Additionally, the one-size-fits-all design of courses limits teachers' effectiveness if
they do not possess the skills to support students with disabilities properly. Furthermore, if
the teacher has trouble understanding the concept being taught then this creates a situation
where neither the student nor the teacher can progress as the teacher cannot teach.
Conclusion
Financial capability should be taught in schools. Schools ensure that every student receives
a baseline level of knowledge equally. While home learning is still important, the person
teaching may not have the knowledge needed to teach the child. Furthermore, a better
approach would be for the child to learn in school the theories and methodologies about
budgeting, saving, spending etc, and then incorporate it into activities with their family like
budgeting, saving, and spending. Studies in this essay show that financial capability program
integration can be successful, and NZ can adopt or follow by example other successful
countries. This would limit the possible mistakes that can be made as you are following a
successful example and improve the overall financial capability of future generations. In
summary, introducing financial capability as a subject to learn for students can positively
affect the economy, the student, and possibly the people around the student such as their
parents or guardians. With a mix of home and school learning, kiwis will be more equipped
to deal with the further financial problems they will face.
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