When it comes to teaching our next generation how to be money smart, revered finance journalist and educator Nicole Pedersen-McKinnon says the younger the better. With only four-in-10 students even passing her basic financial literacy test, Nicole says high school is the crucial time for today’s youth to adopt the right attitude to money.

“Early money mistakes can often condemn young adults to a lifetime of debt and insecurity,” says Nicole Pedersen-McKinnon.

“The fact is 50,000 Queensland high school students were unleashed into the world a few months ago and while they probably know more algebra and Shakespeare than just about any of us at the moment, their real world money smarts are worryingly lacking.

“Basic money smarts, and we’re not talking about anything too sophisticated here, promotes a future with options and opportunities.”

Nicole’s passion stems from two decades in finance journalism and education. The Buderim-based mother-of-two has an impressive career behind her including launching and editing the Australian Financial Review’s Smart Investor, editing for the UK’s Financial Times and writing Fairfax’s highly popular Money Mentor column for more than a decade. Here in Queensland, you’ve most likely caught her sharing money tips on radio and television with regular segments on Channel 7’s The Morning Show, Daily Edition, Sunrise, Today Tonight and Channel 9’s A Current Affair.

“You could say finance chose me, I was lucky enough to get my first job as a finance journalist, I just took to it and from there decided to complete all my finance qualifications, which I hold in the UK and Australia,” says Nicole, who proceeded to win the top award for finance journalism in both countries.

“I’ve been investing in the share market since I was 18 years old and I grew up in a family where we always talked about how we were going to save and secure the future and how the house was going to be repaid. Money was on the menu, we talked about it over the dinner table.

“All of my experiences over the past two decades and everything I have seen made me realise we are leaving it too late to teach money and financial health and wellbeing to our youth. It’s one of the key determinants on how happy your life is going to be, and it’s not even about whether you are rich, it’s about being financially secure so you have options and choice.

“My presenting and filming work with the likes of Paul Clithero, Ross Greenwood and Noel Whittaker really showed me that university was too late to learn how to be money smart.”

In an effort to establish a baseline for financial literacy in Australian schools, Nicole created a test for students comprised of 10 basic questions they need to know the answers to when they leave the school gates for the last time and the results were alarming to say the least.

“So far the average mark is a fail,” says Nicole. “Only one out of every 500 have scored 10 out of 10, which is very worrying.

“High school is the pivotal patterning point for adopting the appropriate attitudes to money. That’s when kids get their first jobs and their first pays.

“Unfortunately teachers are so flat out teaching what they have to get through in the school curriculum there is no time left to teach kids about money,” she says. “But by using this data, I will be able to see where the holes are in the knowledge and where they need help with real world education, which can help them avoid some of the pitfalls in the future.”

In today’s digital age, Nicole says high school students are even more at risk of being targeted by clever marketing and advertising campaigns aimed directly at school leavers.

“It’s more difficult for young people nowadays than it was in previous generations, and not just because physical money barely exists,” says Nicole. “Parents and students need to know that graduating students are fair game. They are the untapped market for marketers through the explosion of fintech (financial technology).

“Here we have these incredibly tech savvy young people without the financial smarts to navigate this fintech industry that is targeting them big style. That’s why it’s even more important they are taught money smarts before they leave school.”

Credit card debt is the number one pitfall for young school leavers, and with recent changes to the Australian Credit Card reporting system, it’s more important than ever that young people are aware of the dangers.

We are leaving it too late to teach money and financial health and wellbeing to our youth.”

“There is nothing wrong with using a credit card when it’s used correctly and paid in full by the due date and it is still a good strategy for young people to get a credit card to establish a credit history, but they have to be more careful than ever it doesn’t wreck their rating,” says Nicole. “To young school leavers, a credit card can be a bit like a fairytale, you just flash this bit of plastic and bag the goods. They often don’t realise the evil bill is going to come in a month’s time and perhaps that bill is going to grow and grow and take them 10 years to repay.

“Changes to our credit reporting system to make it more like the U.S. means your every money move is captured, warts and all, and could really hurt your chances of getting credit in the future, I call it the nude money selfie. Young people can sabotage their credit card rating very early on and end up paying a higher rate of interest, or even getting black-listed. I teach them it’s vital they present themselves in the best possible light from the very beginning.”

Nicole’s wealth of knowledge, combined with her passion to see young Australians with better financial literacy led her to develop Smart Money Start last year, a multimedia financial literacy presentation aimed at Years 9 to 12.

After just 12 months, her presentation and teaching advice has already been featured on the cover of The Sunday Age and Sydney Morning Herald Money sections, and on Fairfax websites all over the country. She has been selected to be an official ambassador and presenter for ASIC money smart education week and was MC at a Parliamentary breakfast at Parliament House in Canberra last month to highlight the importance of financial literacy.

“It’s an all-singing all-dancing presentation,” says Nicole. “I showcase my television segments, I have an app, I have goal forecasting tools to show them how much they need to save to get to schoolies, to afford a car, to afford a holiday and I’m thrilled to say that schools all over the country are now embracing it.”

And her message is striking a chord with students when they discover just how much they can save by following a few basic rules.

“Albert Einstein said that compound interest was the eighth wonder of the world –  he or she who understands it earns it, he or she who doesn’t pays it. This Theory of Relative Worth, as I call it, was an amazing revelation,” says Nicole.

“When I tell kids that if they start saving $6 a day, at 8 per cent return (which is the share market average) they will be a millionaire by 60, their eyes light up.

“But what really gets their attention is $900,000 of that is earnings, or free money; only $100,000 comes out of  their pocket.

“The one thing that these guys have on their side is time and if they use that smartly, to its full advantage, they can easily create the life they dream of.”