What is financial capability?

For Ecstra Foundation, financial capability is more than just understanding money or financial literacy.

Many factors influence individual behaviours, attitudes to money and financial decision making. These can include personal health, income, employment, family background and social support structures.

Financial capability is being able to talk about money, to make informed decisions about money and to feel financially secure.​

At Ecstra, we are supporting Australians to talk about: 

  • How we learn about, make, spend and save money

  • How we plan for today and the future​

  • How life factors affect our money confidence and decisions​

  • Who to turn to for help in times of financial difficulty​

  • The lasting impact that financial inequality has in Australia​

Why does financial capability matter? 

One in three Australians find dealing with money stressful. Many people find it difficult to talk about money or ask for help. Vulnerable consumers are more likely to be financially excluded and find it harder to recover from financial setbacks.

Financial capability is important to people and the economy – it impacts many areas such as housing and job choice, living standards, physical and emotional health and security in retirement.  Financially secure and confident communities contribute to the overall economic wellbeing of Australian society.

Schools teach financial literacy in a crowded curriculum.  The science, reading and maths achievements of Australian students are declining. There is a clear link between low performance in maths and reading and low financial literacy.

The financial landscape is complex. The recommendations of the Banking Royal Commission, the aftermath of natural disasters and the pandemic requires a long term, responsive, consumer centric approach by financial and other service providers.

Making sure there are appropriate consumer protection frameworks and community knowledge of consumer rights and redress are as important as addressing financial capability.

Ecstra’s initial funding

Ecstra is funded by Community Benefit Payments made under the terms of ASIC’s Enforceable undertakings actions with financial institutions and individuals. Enforceable undertakings may be accepted by ASIC as an alternative to civil or administrative action where there has been a contravention of the legislation ASIC administers and may include a payment for the benefit of a particular group of consumers or organisation. For further information visit ASIC’s enforceable undertakings register.

National strategy

There are many organisations working on addressing financial capability and wellbeing. Much of this work aligns with the initial and successive National Financial Capability Strategies, the most recent being launched in 2022.

The network of government, community, educators and business sectors was led by the Australian Government, and aimed to support people to manage their money and recognise that when more Australians are in control of their financial lives, everyone benefits.