When it comes to money matters, young people who know better, do better

A long life awaits the young people of today. If they can live to be 100 or even more, they will need to be able to chart a path through times of crisis and change. They will need to be able to invest in new skills as labour markets shift. When artificial intelligence (AI), or the next technological discovery, opens a door of opportunity, young people will need to be able to walk through it.

So many experiences and discoveries lie ahead for those who are curious. But to deal with all life has to offer, young people need to master the topic of money. Conversations about money need to become a routine part of life. Leaders in business and government need to speak out in support of financial education for all, delivered in schools, because that is the best chance of reaching everyone.

Knowledge about money is sorely lacking among young people in Organisation for Economic Co-operation and Development (OECD) countries, particularly among those in vulnerable groups.

About one in five 15-year-olds scored at the lowest level of financial literacy in the 2022 Program for International Student Assessment (PISA). This means they cannot recognize the value of a budget or make simple decisions about finance using basic maths. On the other end of the spectrum, only about one in 10 students score high, meaning they can analyze complex financial products and solve non-routine financial problems.

Not only is financial literacy lacking among many young people, but it is lower among those with low socio-economic backgrounds. Socioeconomically advantaged students performed better on PISA than disadvantaged students across countries and economies. A gender gap is also already evident among 15-year-old students.

With advanced technology, young people have more financial decisions at their fingertips. It‘s easy to buy with a click and postpone the payment. It’s possible to invest in products that weren't available to earlier generations, such as crypto assets, which can generate high returns but carry high risks. New opportunities to build wealth are at hand, perhaps in tax-favoured accounts offered by governments. Young people will need financial knowledge to navigate these choices now and throughout their futures.

I witness this pattern in my research and among my students: Those with high financial literacy exhibit savvier financial behaviour. Those who know better, also do better.

So let’s help everyone do better. During the OECD's Global Money Week (16-22 March), we celebrated what has been done so far to improve young people's access to financial education and looking ahead to Financial Literacy Month in April, we aim to continue those conversations about money. There are already some signs of progress, including more research and data on financial education around the world.

That progress is being carried forward across many entities worldwide. The EuroSteps Walking Challenge, for example, brings financial education to life in engaging and accessible ways. Members of the World Economic Forum's Global Future Council on Financial Education convene to drive other programmes and to have global conversations that advance financial literacy around the world. The Stanford Initiative for Financial Decision-Making is taking steps to scale education, influence policy and support research to ensure this knowledge reaches every student – young and old.

Collectively, we are moving closer to the goal of financial literacy for everyone.

It’s time to push for even more progress. Open conversations about money help everyone become familiar with this topic that is so important to people’s lives. The discussion of money matters should be routine, from parents speaking to children (and vice versa), to young people talking with their peers about money and sharing experiences and aspirations.

Schools can jumpstart the conversation and make it approachable to every level of learning. They have the best chance to make sure that no young person is left behind. By adding financial education to school curricula, we can reach everyone – from the North to the South, from big cities to rural places and from rich families to poor families.

Young people are accessing more financial products, so we must also improve the information we offer about risks. And we must address differences in financial literacy, including closing gender and socio-economic gaps. All young people will benefit from the confidence that comes with financial literacy.

Young people are the future, so let’s help them build a bright one. Talking about money is a critical step to help with this, and it’s a step that’s well within our reach. Let’s take it together.