How can Canadians Improve their Financial Literacy?
Numerous surveys, studies and town hall style meetings have highlighted the fact the average Canadian has a less than average understanding of their personal finances and how to manage them properly. Throughout 2014, the Financial Consumer Agency of Canada met with stakeholders and held consultations across the country to ensure the development of a national strategy that meets the needs of all Canadians. The strategy was released on June 9, 2015. It sets out goals and priorities to help Canadians better manage their finances and make appropriate decisions as their needs and circumstances change. It calls on organizations to join efforts to help Canadians take action and make financial literacy a life-long journey. ?
One demographic in Canada which has been extensively surveyed to gauge their Financial Literacy level have been millennials. These are Canadians born between 1981 and 1996. A BMO Wealth Management report completed in July 2017, stated that a lack of Financial Literacy could be holding millennials back. Canadian millennials are better educated than their parents, are more likely to spend money on philanthropy and have more diverse skills. The BMO report sites a PWC study which found only 24% of millennials have basic financial literacy and only 8% have high financial literacy. Basic financial literacy was defined as only understanding assets, expenses and income. The more complex financial topics like mortgages, types of bank accounts, savings vehicles, and personal taxes are not understood.
The study also stated that 39 per cent of millennial men said they were concerned about their level of literacy, while 29 per cent of women said they were worried. Millennials said addressing other personal matters — such as job security, relationships and living situations — was more important than learning about finances. Millennials are serious about saving money with 72% saying they are saving for something specific – but are they saving in the proper bank account or investment vehicle.
So where does one turn go to help improve their financial literacy? The Bank of Canada website lists Canadian and international websites that provide financial information, on topics such as inflation, banking, personal finances, investing and consumer protection. These websites would include the Canada Deposit Insurance Corporation, Canadian Mortgage and Housing Corporation, Canadian Bankers Association and the Investor Education Fund (IEF) to name a few.
It’s up to every Canadian to raise their level of Financial Literacy, but in reality this objective is low on the list of priorities for most Canadians. One of the central roles of a Certified Financial Planner professional is to educate their clients and the population in general on all things financial in order to raise the financial literacy level of Canadians. At Assante, this education is at the core of what we do every day.
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