‘Financial literacy is not a buzzword — it’s a life skill’
Ever since childhood, I have been fascinated by the way money works.
My earliest financial memory dates back to the time my mom and I were in the checkout line at Zellers department store and a customer ahead of us used cash to pay for her purchases. “We don’t use cash — we use credit cards,” I exclaimed (I must have been 7 or 8 years old).
I recall my mom cringing and telling me that we needed to have a conversation about where money came from. That evening, my mom, dad, sister and I discussed how money was made, how credit cards were to be used and the joys of compound interest.
As I grew older, I started to hear more about investing, building wealth, budgeting, saving and effective money management. Over time, we continued to have financial conversations over dinner and the topics matured. We discussed RRSPs, wealth-building, stocks and securing more than one stream of income. My parents were adamant that I understood that money was a tool to be respected, protected and that savings needed to work for you, i.e. compound interest.
Fast-forward a decade, and I became a student in International Business and Marketing at Concordia’s John Molson School of Business. In my third year, I took a personal-finance class with Professor Larry Boyle.
After class, I reviewed the syllabus and decided to dig deeper into each topic. I realized that financial literacy is not a buzzword — it’s a life skill. Financial intelligence is as critical to our well-being as critical thinking, problem solving and decision-making.
When you hear the words “annuities, TFSAs, RRSPs”, how does that make you feel? According to a 2018 report by the Financial Planning Standards Council, such financial terms evoke stress and frustration among 48 per cent of Canadians.
News from Statistics Canada is just as grim. According to the government agency, household debt as a proportion of disposable income is 177.1 per cent across the country.
In other words, Canadians owe $1.77 in debt — think consumer credit, mortgage and non-mortgage loans — for every dollar they have.
How can we get out from under the debt thumb? Financial literacy is the key. So where should financial literacy be taught? If the goal is to help students to better understand finances, then financial literacy classes should be considered a mandatory part of high school and university curriculums.
By learning more about this topic early in life, Canadians can better understand how to save, pay for a house and create a budget, and why paying the minimum on a credit card is not a good approach. We need to understand how to save and invest for the future.
A financial education is key to building confidence and preparing students to make good financial choices throughout their lives so that they can attain their goals.
We all need to build wealth and actively participate in the economy — that’s something to bank on.