If the economic downturn of 2008 taught us anything, it’s that investing offers no guarantees. As markets collapsed and unemployment figures grew, casting a pall over individuals’ financial situations, the need for Canadians of all ages to build at least a basic level of financial education was underscored.
November is Financial Literacy Month in Canada, which means the topic is being given the attention it deserves by government, private industry, the media—and by Benefits Canada.
Financial literacy is certainly a topic those working in government and the financial industry are giving increasing attention to. The Task Force on Financial Literacy, created by the federal government in 2009 to develop a national strategy aimed at improving Canadians’ financial knowledge, released its report in 2011, including 30 recommendations for how governments, the education system and employers can improve the situation. There have also been conferences and other events in recent months focused on how to improve Canadians’ financial literacy levels.
Perhaps, most important, Canadians themselves are beginning to realize the importance of improving their own financial knowledge and the link between their financial situation and stress levels. According to the results of a national survey released last week by the Canadian Institute of Chartered Accountants, 65% of respondents who said they don’t maintain a household budget experience some degree of money-related stress, compared with 46% of those who closely stick to a budget. Even better news—more than three-quarters of those surveyed said they have developed a budget. And, according to BMO’s second annual Financial Literacy Report Card, half of Canadians say their financial literacy has improved since 2008.
“Improving financial literacy among Canadians is critical to the financial well-being of families, as well as the overall economy,” said L. Jacques Ménard, chairman of BMO Nesbitt Burns and vice-chair of the Task Force on Financial Literacy. “Increasing financial literacy should continue to be a focus for all involved, including financial institutions.”
Of course, it’s one thing for Canadians to better understand how to manage their household finances. It’s another challenge altogether to encourage them to save adequately for retirement—especially with unemployment figures still not returning to pre-2008 levels and investment markets remaining shaky. But with a growing interest in financial issues by Canadians and a growing commitment to advancing financial knowledge by government and the industry, there’s reason to believe financial literacy in Canada has a bright future.