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Financial Literacy: Why is it Important?

Posted by: Gavin Au-Yeung Date: April 21, 2020 Category: Blog

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 useful, a lack of understanding may have repercussions.

Having a strong 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 important?

On a personal level, having the ability to use your money efficiently can keep individuals living comfortably. Financial literacy teaches the importance of how to use your money effectively so that personal goals can be achieved. In fact, financial literacy is so important that it can often encompass every aspect of your life. For example, family life is heavily dependent on smart financial decisions; from buying a house to sending your children to school.  Simply put, 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. 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) in recognition at the importance of financial literacy.

Recent results from the 2019 Canadian Financial Capability Survey (CFCS) demonstrate the importance of financial literacy among Canadians. Furthermore, the survey reveals Canadians’ knowledge, ability and behaviours as related to financial decision making. The survey’s findings indicate that Canadians are facing financial pressures managing their debt and day-to-day finances. In addition, many Canadians believe that budgeting is critical for managing their daily finances, tracking bills, and paying debt. Click here for more key findings from the 2019 survey.

Financial Literacy Resources

The Government of Canada and the FCAC has a national strategy for Financial Literacy. Click here to view it.

Money Mentors provides online courses covering an array of topics to boost your knowledge. Click here to access their free courses.

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. Click here to visit their website.

The Credit Counselling Society is an accredited non-profit charity that helps Canadians with their money by providing dree credit counselling, low cost debt solutions and education to Canadians. Visit their website by clicking here.

Career Loans can help you achieve your financial goals

Internationally trained newcomers in Alberta and Saskatchewan who are looking to return to their career field may be eligible for the free services provided by Career Loans. Our expert counsellors will guide newcomers through the foreign credential recognition processes. Returning to your career is as simple as signing up on our website.

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