Saving strategies
November is Financial Literacy Month, and we’re doing our part to help spread the word. This initiative was started by the federal government in 2012, and is led by the Financial Consumer Agency of Canada (FCAC). Improving your financial literacy is an important step in taking command of your affairs, and we’re joining with other businesses, government and schools to encourage all Canadians to brush up on their financial knowledge and skills.
Just the facts
A study produced a few years ago by Statistics Canada reveals some interesting facts about financial literacy in Canada. For starters, the study found that the majority of Canadians are not confident in their financial abilities and only 31% of women, and 43% of the men surveyed for this study considered themselves financially knowledgeable.
When looking at the results of the survey, however, only 22% of the men included in the survey were able to correctly answer five key questions on interest, inflation, and risk diversification. Women scored slightly lower with 15% providing the correct answers.
As discussed by Rubina Ahmed-Haq in a recent Oaken Blog article published earlier this year, these gender differences might be partly related to the way couples tend to manage household finances. The UBS study referenced in this blog article found that in nearly 60% of the couples surveyed, men were responsible for the majority of financial decisions.
Time for a test!
Increasing financial literacy begins with an evaluation of your own knowledge. A good place to get started is this self-assessment quiz provided by the FCAC. This quiz includes questions on general financial awareness, but most questions are about things like your budgeting and planning activities, as well as the sources of information you rely on to understand your finances.
You may also want to take this opportunity to jumpstart the conversation with your children or grandchildren. Getting an early lead on financial literacy is essential for strong financial management, including debt management. This discussion guide provided by the Globe and Mail is a great way to approach the issue with children who are in their later teens and about to enter “the real world.”
A month of learning
The theme for this year’s Financial Literacy Month is “Take charge of your finances!”, and that’s something we strongly support at Oaken. It’s important to us to help provide you with the tools you need to better manage your savings.
The month is further divided into weekly sub-themes, beginning with Week 1 (November 3-9), which emphasises the need to Start with a budget. A formal budget is one of the most overlooked aspects of financial planning and is a vital skill everyone should learn.
Week 3 is dedicated to Setting financial goals. This involves determining where you want to go, how long you need to get there and how much risk you’re willing to take on to do so. That’s followed by Week 3’s theme of Be a smart financial consumer. This is an aspect of financial awareness that is often neglected.
The month then wraps up with the theme for Week 4, which is Borrow money wisely. Managing debt, improving your credit score and getting a handle on what an increase in interest rates might mean for your finances form the core of this week’s learning.
A lifetime of learning
Adopting good financial practises is the foundation of long-term financial success and devoting just a few hours each month to such things as reviewing your statements and browsing the financial pages of the newspaper can pay great dividends over the long run. Just like going to the gym, financial literacy should become part of your regular routine and once the routine is established, it’s that much easier to stay in shape.