5 reasons why financial literacy matters
The more you know about personal finances, the better decisions you can make when it comes to managing debt and setting financial goals. Before you read through our list of resources, here are five reasons why financial literacy is important at all stages of life.
Five reasons why financial literacy matters:
1. You'll understand your options betters
Managing your finances is more complex than ever. With so many products and services to choose from, it’s hard to know which ones best suit your needs. One part of financial literacy is learning about the different products and services available to you — this will help you understand what options fit your budget and lifestyle.
2. It’ll help you set realistic goals
When you have your finances in check, it’s much easier to sit down and set realistic goals for you and your family. Are you looking to a buy a new car? Is your child going away to university? Are you planning a family vacation? Financial literacy will give you the skills to create a detailed budget so you can achieve your financial goals.
You’ll gain the knowledge and confidence you need to make the financial decisions that are right for you."
3. You’ll feel confident when making financial decisions
Figuring out your finances can be overwhelming, and you might not be sure where to go if you have questions about your financial situation. As you improve on skills like saving money and paying off debt, you’ll gain the knowledge and confidence you need to make the financial decisions that are right for you.
4. It’ll give you the skills to manage debt
With Canada’s debt-to-income ratio at a record high, it’s more important than ever to improve your financial literacy.1 If you’re carrying a lot of debt, learning about debt management can help get your finances back on track. It can also help you decide what kinds of credit products you should apply for, and when you should apply for them.
5. You can teach your children about finances
Kids look up to the adults in their life to learn important life skills, especially when it comes to money. How you deal with your finances sets an example for your children. When you have a good grasp on financial literacy, you’ll be able to share your knowledge and give your child the ability to manage their own finances in the future.
Where can I go to learn more about financial literacy?
To celebrate Financial Literacy Month this November, we’ve compiled a list of resources to help you build your financial literacy toolbox.
Financial Consumer Agency of Canada (FCAC)
The FCAC launched the first Financial Literacy Month in 2011 to raise awareness among Canadians about the importance of financial literacy. The FCAC’s Financial Literacy Month site is a great place to find tools and calculators, financial literacy resources and blog posts that offer tips on managing personal finances.
Financial Literacy Action Group (FLAG)
To support Financial Literacy Month, the FCAC introduced the Financial Literacy Action Group (FLAG) — a group of seven organizations that work to assist and improve the financial literacy of Canadians. Visit their websites for free financial literacy resources and tools:
- ABC Life Literacy of Canada
- Canadian Foundation for Economic Education (CFEE)
- Credit Canada Debt Solutions
- Financial Planning Standards Council (FPSC)
- Investor Education Fund (IEF)
- JA Canada
- Social and Enterprise Development Innovations (SEDI)
What financial literacy tools does Fairstone offer?
We’ve developed a series of tools that enable you to learn more about personal loans and borrowing, including:
- Calculators (loan payment calculator, debt consolidation calculator, personal loan calculator)
- An infographic that explains how interest rates work
- Videos that answer common borrowing questions (on credit scores, debt consolidation, personal loans and interest rates)
- Articles about loans, credit and achieving financial goals
As you read up on financial literacy and build your skill set, you’ll start to feel more confident about making decisions when it comes to managing debt and setting financial goals.
This article is for informational purposes only. For personalized financial advice, you should contact a qualified financial advisor.
1"Canada’s debt-to-income ratio sets new record high at 165%.” CBC News. 11 Mar, 2016. Web.