Financial education in Nordics is first-rate but unequal

30.08.2023 8 min read time

Many young people in the Nordics would need more financial education, and everyone would benefit from more transparent talk about money, says Anu Raijas, Adviser in Financial Literacy at the Bank of Finland.


Carefree young people don’t know how to use money properly, and economics isn't taught in school either – or is that the case? Have young people gotten off too easy and missed out on essential financial skills? Anu Raijas, Adviser in Financial Literacy at the Bank of Finland answers four myths about young people's financial skills and perceptions.


Myth 1: Young people have poor financial skills

According to Raijas, it is easy to challenge the myth, because, in the part of the PISA 2018 study regarding Financial Literacy, Finnish youth were ranked in second place, right after Estonia. The other Nordic countries did not participate in the survey on financial literacy that year, but Raijas believes that the competence of young people is approximately at the same level in all Nordic countries.

– The level of school education in the Nordic countries is very good, and young people can be involved in the financial system at an early age and receive, for example, bank cards and learn how to use them for paying.

The flip side is that competence is somewhat polarised. Studies have shown that the financial skills of young people are linked to socioeconomic factors, such as their parents' work, educational background or income. Culture also has an effect: for example, in some immigrant families, it is not customary for children to get their bank cards at a young age.

– In general, it is of great importance how financial matters are handled in the family and how they are talked about. The more parents teach in practice, for example, how to pay bills, make ends meet and pay taxes, the more children learn about finances.


Myth 2: Young people have lived in times of abundance

Traditionally, the trust of young people in the economy has been strong and their attitude is optimistic. According to Raijas, it’s no wonder – after all, today's youth have mainly lived through prosperous years.

Today's young people did not live through the recession of the 1990s, and the financial crisis of 2009 did not test the nation as widely and forcefully. It is known that the recession had a strong impact on the children and young people who experienced it, and the effects have been seen, for example, in the way that they are less willing to take out a loan.

Raijas notes that the optimism of young people also indicates that they do not have a lot of experience in managing finances and are not familiar with all the related risks. However, in recent turbulent years, the pandemic and the war in Europe have shattered the previously stable confidence of young people.

– There is nothing wrong with optimism in itself. On the contrary, it’s good that young people have a positive outlook on the future. There have been even too many causes for grief in recent years.

Experiencing the fluctuations of both one's own and the state's finances quickly turns optimism into realism. During the COVID-19 pandemic, the lines of business that employ young people suffered financially, and many lost their jobs or did not get summer jobs. For example, if you miss out on your first summer job, you will also miss out on the lessons learnt from working: practices related to wage payment and taking care of taxes. Inflation has a concrete effect on young people’s finances as well.

– Right now, young people are troubled by uncertainty about the future. As long as the war continues, we will certainly remain slightly cautious.


Lowell_Anu_Raijas_1_2400x1260Overall, Financial education in the Nordics is at a high level, but it should be more equal, says Anu Raijas, Adviser in Financial Literacy at the Bank of Finland.


Myth 3: Financial education is not sufficient

As can be concluded from the success of young Finns in the PISA exam, education is at a high level. According to Raijas, teaching in Nordic elementary schools is of high quality, but it would be essential that it also continues in upper secondary education. After elementary school, some young people continue to high school where economics is taught, but it is rare in vocational schools.

– The division makes young people unequal. It would be important that those studying in vocational schools also receive financial education. Many of those who study for a profession will move on to start a company, so they need financial skills.

However, in Raijas' opinion, it would be best for young people to receive financial education from several different parties and in various channels. Many third-sector operators organise, for example, economics-related courses or share information on social media. Some are specialised in sharing information about entrepreneurship, employment or managing finances.

– Financial education organised by third-sector parties could also reach those who are not covered or feel addressed by school education.


Myth 4: Financial matters are not discussed enough

According to Raijas, matters related to money have traditionally been considered private in the Nordic countries and have not been opened up to outsiders of the family. It has caused harm, especially by making financial issues something to be kept hidden. Many people do not know their rights and obligations, for example, as employees.

– Young people should not be left with the impression that they must comprehend something they don’t understand and don't even know who to ask.

Addressing economic issues better than today requires change and openness especially from adults, because they set an example when talking about salaries, saving or spending money. Raijas would also harness young social media influencers to make a change towards a healthier culture on talk related to money.

The change has already begun, but it is happening slowly. Raijas believes it to be a good thing that the media has introduced people whose financial affairs have gone awry. It supports the idea that problems can and should be spoken out loud.

According to Raijas, young people in their twenties are still not that comfortable talking about, for example, their salaries, but there is a more ongoing discussion about the prices of products and where it is worth spending money.

– I hope that salary transparency will become widespread. It is in everyone's interest that people know what salary is reasonable for which position.


Lowell Focus Nordic

Lowell Focus Nordic