November Is Financial Literacy Month In Canada

Today, the average Canadian owes about $1.70 for every dollar of income he or she earns per year, after taxes. In the 1990s, the average Canadian owed just 85 cents per dollar they earned.

In addition, the average Canadian household debt was $72,950 at the end of 2019 - $23,800 if you take out mortgage debt.  Think about that. The average Canadian owes almost $24,000 in credit card debt, loans and lines of credit.

What is apparent is that there is greater demand and necessity for financial education. Canadians are simply not financially literate enough - that is, too many people do not possess the knowledge and ability to make good financial decisions, leading to pro-longed debt, low credit scores, and lack of savings. Financial illiteracy is a problem that can affect anymore, regardless of income or education level, and can infiltrate every aspect of life.

November is Financial Literacy month in Canada, and is significant this year not only because it marks the 10th anniversary of Financial Literacy Month, but also because it's been one of the most challenging years on record for many Canadians due to the economic impacts of the COVID-19 pandemic. 

What can you do to improve your financial literacy?

1. Review your finances

Take stock of the money you have coming in, understand where your money is going out, and get a grasp of what you owe. It's a good idea to write everything down so you have a clear picture of your cash flow and financial situation. Get as accurate as you can, taking into consideration every dollar you spend.

2. Discover if you’re making financial mistakes

Do you have an emergency fund? Are you living within your means? What about your bills, are you making late payments? Maybe you’re not contributing enough towards your debts. Pinpointing and recognizing our mistakes is crucial to correcting them.

3. Start managing your credit more effectively

Only use your credit cards if you have the cash to pay it off and try to pay more than the minimum towards your debts. Consider leaving your credit cards at home if they pose too much of a temptation for you. Mismanaging your credit leads to debt that will just keep growing and growing. Most importantly, check your credit so you know where you’re starting from. Click here for your free credit score.

4. Make a budget and document it

When you put something down in writing, it makes it much harder to ignore. You’re far more likely to experience success when it comes to your ability to stick with your plan. So get your financial plan on paper as soon as you can.

Related Article - When in debt, making a budget can seem like an overwhelming ordeal. We’ve compiled “8 Tips for Successful Budgeting” in order to make planning your budget much easier.

5. Discuss your finances with family or financial advisors

Two minds are better than one! Discussing your finances with a trusty friend or advisor can give you some much-needed perspective on your current situation. Remember that successful money managers can help you implement your own financial plan.

6. Stay informed and keep learning

We live in the age of information. There are no shortages of resources you can use to learn about money and finances. From YouTube channels and podcasts, to forums and subreddits that focus on money management, the possibilities are endless. One resource, in particular, is this blog, full of financial knowledge and know-how. Bookmark it now, so you’ll never lose it.

Although financial literacy isn't something that's taught in school, you can still learn it on your own. Take control of your situation by choosing to become more financially capable! The resources are there, all you need to do is take the first step.