Making financial decisions without any idea how to handle them can be a daunting experience – especially for young adults trying to figure out independence for the first time. Knowing and being able to apply financial concepts is essential for young adults as they start to look after their own finances.

A recent government study found that 49% of 18–25-year-olds lack the confidence to make financial decisions, while 94% of 14–17-year-olds think that understanding money management is crucial. The message is pretty clear – young people need financial education, and students are actively looking for relevant financial skills, but all too often they’re not getting them.

Schools may teach the basics of how to manage money in day-to-day life, but many don’t cover the essential financial skills like budgeting, managing debt, or saving effectively that form the foundation of long-term financial well-being. Learning these skills can give you a sense of control over your finances and confidence that you can look after your money. Financial literacy helps students develop the ability to make informed decisions and get into good financial habits early on. Without guidance, young adults can easily get caught up in debt traps that affect not just their finances but also their lifestyle and mental health.

Taking small steps to develop financial literacy can give young adults a sense of control over their finances.

Case Studies: James (24)

When James landed his first professional job after uni, he jumped at the chance to be independent, moving out, buying a car, and planning a trip overseas.

While he earned a good income, his pay cycle didn’t quite align with his bills. To bridge the gap, he started using his credit card. At first, he managed repayments just fine, but when bigger expenses came up, he began paying only the minimum balance – and the debt started to snowball.

Two years later, James was struggling with repayments, ended up having to sell his car, and moved back home. It was only then that he realised he’d never been taught how to create a personal budget, something that could have helped him avoid financial stress altogether.

With some help from his parents and a financial planner as an adviser, James got some support in developing practical plans for debt reduction and savings. The adviser guided him through creating strategic financial plans and got him back on track with his finances.

Case Study: Harper (20)

Harper’s story is a great example of how financial literacy makes a big difference in real-life decisions. Harper had saved $1,500 towards her first car and needed another $8,500. The dealer’s finance option seemed easy and affordable, so she went for it. But what she didn’t realise was that dealer-linked finance can often come with limited flexibility and higher costs. With her good credit score and savings record, she could have found a better deal through another lender. Knowing her own risk tolerance could have helped her make a more informed decision about which financial option was best for her.

After learning more, Harper refinanced her car loan through her bank account. Although her monthly payments went up slightly now, in the long term she’ll save thousands in interest.

Building Financial Literacy and Confidence

Financial literacy isn’t just about knowing how to budget or where to get a loan – it’s about confidence, independence, and long-term security. It gives young people the tools to make informed choices. Financial literacy education is essential, and is now being taught across different learning areas like Mathematics, HASS and Economics, so students can develop practical money skills for real-world situations.

If you’re a young adult (or have one in your life), here are a few free resources worth checking out. These resources include case studies and examples to make learning practical and scenario-based:

• Local community centres often run free financial literacy workshops.
• MoneyCare by The Salvation Army offers financial counselling and education.
• Universities and TAFEs provide budgeting and money management sessions.
• Banks and financial institutions regularly host webinars on saving and investing.
• Government resources like MoneySmart.gov.au offer calculators, budgeting tools and comparison guides.

Using the right tool and developing financial skills through these resources can give young adults a sense of confidence and support lifelong financial well-being.

Creating a Financial Safety Net

Building a financial safety net is one of the most important steps young adults can take towards lasting financial security. Life is full of surprises – unexpected expenses, sudden job changes, urgent repairs can happen at any moment. Without a plan in place, these events can quickly lead to financial stress and even debt.

Having financial literacy gives you the knowledge and confidence to create a safety net that looks after your goals and protects your future. By learning how to manage your finances, you can make informed decisions about saving, spending and preparing for the unexpected. This might mean setting aside a small emergency fund, reviewing your expenses regularly, or making a plan to pay down debt before it becomes overwhelming. Planning ahead and setting up a financial safety net takes time and effort, but it’s definitely worth it. You get that great feeling of knowing you’ve got a handle on things, and that no matter what life throws your way, you’ve got the financial security to back it up. And on top of that, you’ll have the confidence to take on new opportunities and pursue your dreams.

Working Towards A Brighter Future

Learning about money isn’t just about getting book-smart; it’s about developing a lifetime skillset that’ll serve you well. It can help young adults avoid getting sucked into debt traps early on, make informed decisions about their finances and generally feel more in control of their financial future. Financial literacy is a broad subject that covers all sorts of financial concepts – from investments and superannuation to tax and retirement planning. It’s about giving people the tools to make sense of and apply these key financial ideas to real life.

Getting the right advice from a qualified professional and having a solid grasp of financial knowledge are pretty essential for making informed decisions about your financial future. And interestingly, financial literacy is closely tied to other areas of life like business, wellbeing and overall financial security. Any advice or info you find here is general in nature and certainly isn’t personalised advice.

Learning about consumer and financial literacy, and getting advice about making smart decisions with your money, is especially helpful for young adults. It helps them understand investments, set achievable savings goals and develop some real-life skills for dealing with finance. And on top of that, they’ll be better equipped to make smart investment decisions, manage their tax and superannuation and plan for retirement throughout their lives.

At Insight Wealth Planning, we believe that starting the conversation about money early is key. By getting some financial know-how and confidence now, young Aussies can set themselves up for a secure, independent future.