Financial literacy is the ability to understand and discuss financial concepts and apply them to your own financial situation. It includes skills like budgeting, paying bills on time, making decisions about financial products, planning for the future and being financially prepared for an emergency. That's why financial literacy is really a life skill; as essential as numeracy and basic literacy.
Financial literacy is important for the financial well-being of individuals and families but also for the economy as a whole. Financial literacy is directly related to success for any business. That's why in 2012, the Parliament of Canada proclaimed each November as Financial Literacy Month in order to raise awareness among Canadians and stakeholders about the importance of financial literacy in strengthening an individual's financial well-being.
Never has financial literacy been more critical. Canadians' debt loads are growing, along with financial vulnerability. 4 in 10 Canadians report that money is a daily concern. Many Canadians live paycheque to paycheque. A third of lower income Canadians report worrying about money almost constantly.
Financial decisions are becoming more complex with so many options for savings, spending, investing and borrowing. It is also a time of increasing financial uncertainty with nearly 6 out of 10 Canadians not having a good idea of how much money they need to save in order to maintain their standard of living in retirement.
Throughout the month of November, Canadians are encouraged to invest in their financial well-being. This means:
- Taking control over day-to-day and month-to-month finances in order to absorb financial surprises, meet financial goals and gain financial freedom
- Reducing stress by making a budget and sticking to it to make paying off debt easier
- Having a savings and debt reduction plan
- Making informed decisions including understanding financial rights as well as financial responsibilities as depositors and borrowers
- Starting good habits early means helping kids build essential financial life skills to the next generation
Throughout November many organizations and individuals from across Canada are being encouraged to host events and share resources aimed at helping Canadians learn how to manage their personal finances successfully. Our blog on this topic outlines some good resources you can share. These resources can go a long way to helping Canadians build financial knowledge to make sound financial decisions that will enhance their personal finances as well as business outcomes and ultimately, their local business communities. Please consider sharing these resources in the spirit of Financial Literacy Month to someone you care about that could benefit from improved financial literacy skills.
And please consider working with a financial planner who can help you become more empowered with your finances by improving your understanding of financial matters on an ongoing basis.