As the old saying goes, “Give a man a fish, you feed him for a day. Teach a man to fish, you feed him for a lifetime.” At BlueRock, we apply the same philosophy to financial education, and that’s why financial literacy for vulnerable cohorts is a key area of focus for our workplace giving and pro bono programs.
Financial literacy is defined as the ability to make informed judgements and effective decisions regarding the use and management of money. Australia has relatively high levels of financial literacy when ranked globally; however, according to a recent study, it’s estimated that only 66% of Australian adults are financially literate. Financial literacy for women is at much lower levels than men and young people (18-24) have the lowest levels of financial literacy. This highlights a serious problem in our community.
Financial literacy impacts on an individual’s autonomy, independence, sense of security and wellbeing, so it has an enormous impact on overall life satisfaction. Like many problems in society, the problem of financial illiteracy is compounded for vulnerable cohorts in our community who don’t have the same access to support or resources to improve their financial situation.
BlueRock has a multi-disciplinary approach to growing, preserving and sharing wealth, and we’re perfectly placed to share that expertise with vulnerable groups through our foundation and pro bono program. On an individual level, our staff members are fortunate to have studied and practised in the financial sector. We have access to the tools and strategies to improve our own financial literacy and situations, and we want to share it to increase equity and equality in our community.
Financial literacy is not being taught in Australian schools and this leaves young people, particularly those from lower-socio economic groups, in a vulnerable position as they transition into adulthood. As a society we’re bombarded with advertisements for credit cards, buy-now-pay-later options and payday loans. This leaves young people at risk of getting caught in a debt spiral with serious consequences to their credit rating and ability to plan for their future. There’s a lot that young people can achieve in the future if they start with a strong financial education and plan now.
Victims of domestic violence are a particularly vulnerable cohort when it comes to economic abuse. Financial insecurity can be a huge barrier to people leaving abusive relationships. Education on how to manage money and budgets is crucial to support survivors to get back on their feet after leaving an abusive relationship.
Recent studies have also highlighted that senior Australians have high rates of financial illiteracy and are at greater risk of financial abuse. A study commissioned by Australians Investing in Women revealed women over 50 are the fastest-growing cohort experiencing homelessness in Australia, which is attributed to women retiring with lower superannuation levels compounded by the increased cost of living. This not only impacts their financial position and retirement but also how they make decisions about their health and wellbeing.
One of the key challenges faced by newly arrived individuals and families settling in Australia is accessing financial resources and understanding the country’s financial environment, laws and regulations. Refugees often arrive in Australia with little knowledge of how to manage financial issues like budgeting, insurance and loans. This can lead to crippling debt.
A recent fact sheet published by the Asylum Seeker Resource Centre shows that on average an asylum seeker in Australia can access welfare payments of just $227 a week, compared with $318 for an adult on NewStart and a total of $477 for a pensioner on an Aged Pension. Given the poverty line in Australia is considered to be anyone living on less than $412 a week, we can see the extreme vulnerability of financial illiteracy on the elderly, asylum seekers and the unemployed.
Financial literacy helps individuals understand the fundamentals of budgeting, money management, debt, investing and tax. It reduces financial stress and anxiety, and provides individuals from vulnerable cohorts with autonomy, empowering them to make better financial choices. But most importantly, greater financial literacy leads to greater life satisfaction.
As part of the 66% of financially literate Australians, and with our expertise in wealth services and financial planning, we have a responsibility to promote financial literacy and educate the community to be responsible with money. The Be BlueRock Foundation is supporting several charities who work with vulnerable cohorts by providing pro bono support and by helping implement financial literacy programs with their staff and clients. Watch this space for some upcoming announcements on our new partners and programs.
If you’d like to contribute to our program to promote financial literacy for vulnerable cohorts, you can make a fully tax deductible donation to our Be BlueRock Foundation. Or, if you’re interested in setting up your own Charitable Fund Account and creating a bespoke giving strategy for your company or family, get in touch with our philanthropy experts.