Canadian Financial Literacy: Start Early, Learn Well

By | Lending Education

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Everyone learns differently. Some of us pick up life skills from school that stay with us the whole way through adulthood. Others will never forget sage pieces of advice handed down by parents, friends or mentors. Increasingly, we stockpile knowledge from the internet and apply it to our daily lives. Maybe it all started with a piggy bank and the promise of saving up for something that shone in the neighbourhood store window.

The same is true for what we know about personal finance. Who was your biggest influence when learning to manage your money? Family? Formal education? Or have you taught yourself a method that works for you? Recent Canadian financial literacy statistics indicate that our ability to manage money may need further support from education systems.

According to a report made by Jane Rooney, Financial Literacy Leader for the Financial Consumer Agency of Canada, earlier this month:

  • Only 45 percent of Canadians have a budget.
  • About 30 percent are struggling to pay their bills.
  • 60 percent don’t know how much they’ll need to save to maintain their desired standard of living in retirement.

These are significant statistics in an era where personal debt is at record high levels. Rooney’s report states that the key sources of financial advice for Canadians are, unsurprisingly, banks and financial planners or advisers (each earning 35% of the share of survey responses among those who sought out some form of advice.)

One of the highlights in Rooney’s report were observations about starting the conversation regarding personal finance early in life. Could an increased focus on financial education in youth reverse this trend?

Many [people]… emphasized the importance of lifelong learning, starting in childhood and continuing through the senior years.

Nationally, 45% of recent high school graduates surveyed by the British Columbia Securities Commission in 2011 recall taking a course that covered topics on personal finance. In the same survey, it was shown that only 12% of students had previously written a financial plan. Evidently, schools play a notable role in the establishment of good personal financial practices.

Setting young people up for better savings and investment knowledge will likely pay dividends (financially and otherwise) in the long run. However, starting a conversation about financial literacy and advice can be valuable at any age or point in your career. Progressa was created not only as a lending tool to help people find the financial stability they may need, but also to inspire and spark this conversation. Find out how you can join in today by visiting us online.

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