Comparative analysis of content and pedagogical features
What is the focus for financial education and how is this defined?
The Australian and Malaysian frameworks focus on the development of “financial literacy”, whereas the Australian and Dutch definitions also include consumer literacy. The New Zealand, English, Scottish and Northern Ireland financial literacy frameworks’ focus is named “financial capability”. In South Africa, the financial education component integrated in different courses (economic and management sciences, mathematical literacy, consumer studies and accounting) encompasses a mix of financial knowledge and understanding, skills, attitudes/responsibilities and behaviours. The Japanese framework focuses on financial education which includes “pecuniary education”.
While different terms are used for the focus of the financial education frameworks, there are strong similarities in the definitions for the terms. In all cases, financial literacy and financial capability are seen as being more than being able to make calculations about money. Both are seen as competencies involving knowledge and skills and the ability to use these to make effective financial decisions (see table 3.1.3 in Appendix 3.A1). In this chapter, the term financial literacy is used except when discussing the name of a framework.
For countries using the term “financial capability”, this is defined as the ability to make informed decisions about the personal use and management of money. In Northern Ireland, financial capability also encompasses the notion of financial responsibility. In England, a financially capable person is defined as someone who is a confident, questioning and informed consumer of financial services. The Scottish framework, like the Australian, includes the impact of financial decisions on people’s lives but also on the wider environment in the definition of financial capability.
“Financial literacy” is also seen as encompassing behaviours, knowledge, understanding and skills. Definitions of financial literacy in the United States and Malaysia focus solely on the individual level. In contrast, the Australian definition takes a broader view, encompassing consumer literacy and the impact on the environment and the wider society through ethical decision making.
“Consumer and financial literacy is the application of knowledge, understandings, skills and values in consumer and financial contexts and the related decisions that impact on self, others, the community and the environment.” 1
The Japanese framework focuses on understanding money and finance with the aim of producing values and attitudes that will result in individual life style improvement as well as wider social improvement.