Financial literacy is the knowledge required to make informed and effective decisions about money management. Possessing this knowledge can heavily impact the decisions we make with our money. While understanding this concept can prove helpful, a lack of understanding may have repercussions.
Having a solid understanding of financial literacy can have a dramatic influence on your ability to:
- Retire comfortably
- Avoid accruing high credit card debt
- Pay for your children's tuition
- Pay for any emergency expenses which may arise unexpectedly
- Plan for the future and meet your personal financial goals
- Pursue your "dream job" by improving your credentials through schooling or certification
Why is Financial Literacy critical?
Financial literacy teaches the importance of using your money effectively to achieve your personal goals. In fact, this topic can often encompass every aspect of your life. For example, making wise financial decisions can impact your ability to buy a house to send your children to school. Therefore, the difference between possessing and not possessing financial literacy may be the difference between surviving and thriving.
Governments across the world realize the importance of having financially literate citizens. This is because Citizens who make poor financial decisions can have dire implications on national economies. As a result, the Government of Canada established the Financial Consumer Agency of Canada (FCAC) to recognize the importance of financial literacy.
The 2019 Canadian Financial Capability Survey results demonstrate the importance of financial literacy among Canadians. Furthermore, the survey reveals Canadians' knowledge, ability, and behaviours related to financial decision-making. In fact, the survey's findings indicate that Canadians are facing financial pressures managing their debt and day-to-day finances. Moreover, many Canadians believe that budgeting is critical for managing their daily finances, tracking bills, and paying off debt.
More Resources
The Government of Canada and the FCAC have a national strategy for Financial Literacy.
Money Mentors provides free online courses covering various topics to boost your knowledge.
My Money Coach is a free public service provided by the Credit Counselling Society dedicated to helping individuals and families find solutions to their debt and money problems.
The Credit Counselling Society is an accredited non-profit charity that helps Canadians with their money by providing free credit counselling, low-cost debt solutions, and education.
Recommended Webinar: Financial Literacy for Canadian Newcomers
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