Eight considerations for responsive financial education for people on low incomes

Ensuring financial education better meets the needs of people on low incomes to builds financial confidence and capability.

At a glance

Many financial education resources and programs exist in Australia, yet often these focus on delivering general financial information and skills rather than responding to the complex needs that lower incomes create. People on lower incomes have more limited spending options and often lack the capacity to build a savings buffer, leaving them more exposed to risk. 

Financial shame and stigma are also common for people experiencing financial stress, and they increase the likelihood of disengaging from money matters and create barriers to accessing support. Opportunities and constraints are further shaped by personal circumstances (e.g. disability or cultural obligations) and structural factors, including inadequate income support.

Financial education programs that ignore the unique challenges faced by people on low incomes are therefore unlikely to help participants overcome them. To be effective, financial education must recognise and respond to the shame and stigma that can stem from relying on low incomes and ensure the content delivered is tailored to reflect the options available to participants.

Dive deeper

We identify eight considerations across two domains that can help ensure financial capability programs meet the complex financial capability needs of people on low incomes:

1. Building connection and solidarity between people in similar positions can help address shame and stigma and improve engagement with finances.
2. Helping participants recognise existing skills and identify skill gaps can boost confidence.
3. Removing judgement from individual spending decisions helps to build trust.
4. Financial capability programs delivered by a trusted entity makes it easier to build connection and trust.
5. Simple and accessible language can improve engagement and confidence.
6. Supporting participants can help to manage change and respond to shocks.
7. Helping people access support and navigate complex systems can help reduce stress and increase ability to make ends meet.
8. Providing tailored content ensures financial education is actionable.

Ways forward

To ensure effective financial education, we propose adopting a more intentional approach to fostering connection and solidarity, while ensuring programs are effectively targeted and tailored to the needs of participants. Building on the experience of programs such as Saver Plus and the SEED Project, we recommend:

• Developing group learning that builds connection.

• Employing peer educators and advocates in line with existing programs (e.g. WIRE’s Money Mindset program).

• Helping connect participants to the skills they need and delivering tailored and tested content.