TORONTO, Nov. 6, 2014 /CNW/ - Do you understand basic financial concepts? Are you confident about every financial decision you make? If you had to take a quiz on financial literacy, would you pass? If you answered 'no', you're not alone. In fact, a recent survey revealed that only 10% of Canadians were 'very knowledgeable' about basic financial issues.¹
Financial literacy means having the knowledge, skills and confidence to make responsible financial decisions and it has never been more important. In today's economy, fewer Canadians can rely on generous pension plans or government assistance for a comfortable retirement. As well, an increasingly complex financial environment, lower wages and higher expenses have shifted the burden of financial responsibility to the shoulders of individuals.
Unfortunately, many of us aren't prepared for this new reality. According to Statistics Canada, only 13% of Canadians have taken a course or workshop on personal finance.² More troubling, 60% of Canadians feel they do not have the necessary knowledge to adequately plan their financial future and admit they will need some planning assistance.3
Governments around the world are responding to this reality with programs aimed to educate consumers. In Canada, November is Canadian Financial Literacy Month and Canada recently appointed its first Leader for Financial Literacy whose mandate includes making financial education a part of the elementary and secondary school curriculum.
Financial services providers are also stepping up to bolster the cause of financial literacy: "It's never too early or too late to become more financially capable and every small step towards financial literacy helps," says Tony Garcia, President and CEO of Foresters™, an international financial services provider with a purpose to enhance family well-being. "At Foresters we believe that confidence and knowledge about financial matters can help improve family well-being for years to come."
Foresters™ has created some educational resources for National Financial Literacy Month including an infographic, video and articles. Foresters also provides its members with access to certified financial counselors to help members with money management through its unique Everyday Money member benefit⁴. In addition, Canadians can find a wealth of online tools to help them become financially literate. Here are 5 simple things you can do to get started on your journey to financial confidence:
- Learn everything you can about your finances, including your mortgage terms, bank interest rates and credit score. A recent survey revealed that 8 out of 10 Canadians don't know their credit score.5
- It doesn't have to be complicated. Start with the simple things like contributing to RRSPs, setting up RESPs for your kids and protecting your family's financial future with life insurance.
- Are you one of the 67% of Canadians who wish they were better at saving?6
Keep track of every penny you spend for a couple of months and look for ways to cut back and start saving. Even a small commitment to saving will make you feel better about your finances.
- Look ahead 10, 20 and 30 years. Imagine the life you want and what it will take to make that happen. 70% of Canadians are confident that their standard of living will be sustained through retirement, but only 40% know how much money they need to save to accomplish this.7
- Talk to your kids regularly about money, involve them in household budgeting, open bank accounts for them and encourage them to save for things they want.
Achieving financial literacy is not a means to an end; it's a lifelong endeavour and your knowledge will need to evolve as the economy and your personal circumstances change. The key thing is becoming more informed.
¹Statistics Canada - Canadian Financial Capability Survey; 2009
2Statistics Canada - Canadian Financial Capability Survey; 2009
3Coalition for Professional Standards for Financial Planners, Study
4Foresters member benefits are non-contractual, subject to eligibility requirements and limitations and may be changed or cancelled without notice. Third parties administer Legal Link, Everyday Money and Foresters Competitive Scholarships.
5Canadian Institute of Chartered Accountants - Canadian Finance Study, 2010
6 Statistics Canada - Canadian Financial Capability Survey; 2009
7 Statistics Canada - Canadian Financial Capability Survey; 2009
Foresters™ is the trade name and a trademark of The Independent Order of Foresters, a fraternal benefit society, 789 Don Mills Road, Toronto, Canada M3C 1T9; its subsidiaries are licensed to use this mark.
Video with caption: "Foresters Financial Literacy". Video available at: http://www.youtube.com/watch?v=JU17GTQc18k
For further information: Media Contacts: Maria Ganogiannis, [email protected], (800) 461-8431 ext. 4096