financial literacy

Financial Literacy in Canada

Regrets in life happen, but they are certainly not the goal when you start off. Wouldn’t it be fantastic if you could live life with no regrets? Managing money, investing and getting loans over a lifetime requires constant decision making. Have you ever regretted a financial decision you have made in the past? I know I have.

The best way to minimize the chance of making a money mistake is to obtain a financial education. Financial literacy in Canada is spotty at best. Where can you find solid financial advice that you can trust? In this article we take a look at how to become more financially literate.

First Steps

Make a decision – the saying goes that every journey begins with the first step. In order to become more financially literate you have to make a decision to get better at it. Without making that choice, you are more than likely to continue to stumble along and not get ahead. In fact, you may even go backwards.

Improving, or learning anything new, requires a combination of commitment and determination to not give up. Some people call this “grit”. Even if you don’t see immediate results, if you stick with a good process, you will eventually find success.

This can be tricky if you are in a relationship or have a large household. Everyone needs to be on board to have the best chance at financial success. However, you can still take ownership of your own learning and improve yourself as an individual.

Take an inventory – another good saying is that sometimes you don’t know what you don’t know. We think it is a good idea to write down areas in your financial life based on where you feel strong, average, and needs to improve. This can help you organize your efforts moving forward.

Budget Budget Budget ! – I think every financial article I have ever read about improving personal finances contains several paragraphs about the importance of having a budget. We think that it is even more important to track what you spend each month so that you can have a realistic budget for future months.

Do you know how much you spent on food last month? It is not so easy to remember all of the stops to pick up groceries or take out. By tracking at least your grocery expenses you will be able to more accurately budget into the future.

At a minimum, it is important to take a guess and write down what you think that your budget looks like.

Now that you have made a decision to become more financially literate, have written down areas where you want to improve, and have drafted out a rough budget, it’s time to dig in and start learning.

We all wish we were taught better financial literacy lessons in school. But we can do better for our kids by finding teachable moments so as to better prepare themselves for future financial success. 

Financial Literacy Programs

Canadian financial literacy comes at us all through life and most of us miss it. Some high schools have brief parts of courses on the topic but it is difficult to make it relevant to teenagers:

Dad to son: where do you think money comes from?
Son: the bank atm obviously.

Parents often have not been financially equipped enough themselves to pass on the right information to their kids. Or probably more likely, the youngster thinks they know it all already.

The Federal and Provincial Governments have been doing a better job recently at making financial education available online. Here is a link to a Federal Government website.

Taking the time to go through the site can be challenging but there is some good content. The Federal Government has also tried to highlight this area by having a Financial Literacy Month each year in the fall.

Overall, there is no one “go to” program or location to better your financial literacy. Rather, it seems to be more of a patchwork of different possible sources.

Do it Yourself

If you are keen to improve in this area, there are a variety of resources available if you would like to put the effort in. We can recommend the following:

  • Books – there is no shortage of self help financial books available at the public library for no cost. We constantly recommend a tried and true Canadian book called The Wealthy Barber. It is not a difficult read and you will become much more familiar with the terms that you will need to understand.
  • Youtube – the internet is a great source of information. A word of caution would be to narrow your search to Canadian content as there are different financial products in the USA which could become confusing.
    In particular, we would recommend the youtube channel of Parallel Wealth as having good content.
  • Podcasts – these have become a popular way to discuss a variety of topics and there are many financial podcasts. Again, screening for Canadian content is important. We can recommend both Michael Campbell’s Money talks and DebtMatters podcasts.
  • Online Newspapers or Magazines – these will often post interesting articles. Sites such as the Financial Post or Globe and Mail. This would involve searching out articles and reading the ones that catch your eye.
  • Find a Mentor – one of the best ways to become more financially literate is to find someone in your circle of people who you can talk to about money. In particular, an accountant, investment advisor or a lawyer would be useful. If you don’t have access to someone with that specific training there are many others who are just really good with finances. Start asking them questions!

When you combine all of those possible sources you will be on your way to having better financial literacy. It will require you to take ownership of getting better at it and the perseverance to follow through.

Once you have got to this point it is good to start writing down some financial goals!

Too Much Debt

All of the above is well and good but what if you are deciding to make this journey because you are getting pressure from your creditors and are facing too much debt?

You may need to take some steps to get debt help in order to change the momentum so you can start building some savings and equity. Please feel free to reach out to one of our convenient offices in order to discuss what debt help options are available in your situation.

We offer a no cost initial consultation where we will go over your options. Should you decide to proceed with us, either via a Consumer Proposal or a Bankruptcy, there are two financial counselling sessions where we will assist you in building for a better financial future.

Len Hiquebran, CPA, CA, LIT

After completing my articling at a local accounting firm, I spent some time working in industry as a controller of a logging company. Subsequently, I joined Derek L. Chase & Associates Ltd. in 2017 and began working in the insolvency field. In June 2020 I completed my studies and was granted a license by the Federal Government to be a Licensed Insolvency Trustee.