I must admit, I am not the most financially savvy person you will meet. Raised in a low-income family, I understood about how to survive pay cheque to pay cheque. When I was younger, it was more about making do than investing in my future. As an adult, I thankfully find myself in a different position financially, but navigating my way through the financial jargon and mathematics of it all, can be overwhelming.
I know I’m not alone. In fact, most Canadians struggle with understanding finances. Women even more so than men. In 2014, Stats Canada conducted a survey* with men and women of varying backgrounds. They were asked five key financial literacy questions related to interest, inflation and risk diversification.
The survey revealed that older women (55-64) are the most vulnerable when it comes to understanding finances. In general, only 15 per cent of women and 22 per cent of men could correctly answer all five questions. Women also had less confidence in their ability to understand finances. Only 31 per cent of women surveyed believed they were financially knowledgeable compared to 43 per cent of men.
So, how financially literate are you? Take one of these quizzes to find out!
This quiz is from BDO Debt Solutions Financial. https://debtsolutions.bdo.ca/resources/financial-literacy-quiz/.
You can also “test” your financial health with this quiz: https://debtsolutions.bdo.ca/resources/test-financial-health/
Financial Literacy Month
November is Financial Literacy Month across Canada. The federal government is asking Canadians to “Invest in your financial well-being”. To help Canadians look after their financial health, the government has been providing us with information and resources about money management for the past decade. They want to help reduce consumer debt and increase people’s understanding of finances. They also want Canadians to be prepared for retirement.
In spite of these efforts, the amount of debt Canadians have is increasing. The average Canadian has $22,081** of debt for things like clothes, cars and furniture. On top of that they also have mortgage debt.
How big is the Canadian debt problem? Watch this video by Stephen S. Poloz, the Governor of the Bank of Canada.
As Poloz says, debt is not a bad four-letter word. It can also be good. Mortgage debt is considered “good” debt. It builds equity and is an investment. Today’s economy is built on the concept of debt. Without it, most of us cannot own a house or get a college or university education. We all need to build our investments. The better our investments, the more our money works for us. It is nice when $1 of earned money can become $2 with little or no effort by you.
What you can to do to improve your financial literacy skills
For interesting information, tools and tips on increasing your financial literacy knowledge check out this website:
The Columbia Basin Alliance for Literacy (CBAL) offers programs and workshops to help you improve your financial literacy skills. There are programs to learn basic money management skills and workshops on how to raise money-smart kids. Contact the CBAL community literacy coordinator in your area for more information on what is available in your community.
Community Literacy Coodinator
Columbia Basin Alliance for Literacy - Boundary
* Canadian Financial Capability Survey
** According to Equifax