Children are ready to start learning basic financial concepts at a young age. By seven years old, they have started to develop financial behaviours that they may carry forward into adulthood. Where do they learn these behaviours? It usually starts with the observation and imitation of those who are closest to them. As a parent, you already have the tall task of keeping your children fed, clothed, and safe. Maybe you don’t feel qualified to take on the responsibility of teaching your kids about money and financial literacy. But if you want to help your kids form healthy habits early on, it is possible, and you don’t need a degree in economics to make it happen.
In this article, we’ll define financial literacy and why it matters. We’ll also provide some practical tips on how you can improve your financial literacy so you feel equipped to start teaching your family about money.
What is Financial Literacy?
Financial literacy is the ability to understand how money works and how to use it. It can include anything from the most basic financial concepts like saving, earning, investing, budgeting, debt and borrowing to more complex ideas like interest rates, credit scores, and managing assets and liabilities.
Why Does Financial Literacy Matter?
Financial literacy matters because knowledge is power when it comes to your money. The more you understand about how to make money, save money, and invest money, the easier it is to achieve your financial goals. When it comes to your money, no one will care about it more than you.
There are also important links between your financial health and your physical and mental health. Dealing with financial issues can result in poor sleep, headaches, illness, and strained relationships. In more serious cases, it can lead to high blood pressure, depression, anxiety, and heart disease.
By increasing your financial knowledge, you can begin to take control of your money and your health.
How to Improve Financial Literacy
Improving your financial literacy might sound daunting, but it’s something you can start today. Once you have a grasp on the basic concepts, you can begin to share with your family. You don’t have to be an expert to teach others; you just need to be one step ahead of them. Here are some practical tips for how to start.
Start with the basics
The availability of financial information online and on social media is a double-edged sword. While you have immediate access to amazing financial resources, the amount of information can feel overwhelming. Where do you start, and how do you narrow it down?
The Financial Consumer Agency of Canada (FCAC) is a federal agency responsible for keeping Canada’s financial system safe and strong. It’s also on a mission to strengthen the financial literacy of Canadians. The FCAC is a good place to start if you’re looking for resources to improve your financial literacy. It offers a range of resources to help you manage your money.
It provides information on the following topics:
- Credit score basics
- How to order your credit report
- How to improve your credit score
- How to make a budget
- How to cash a cheque
- Insurance
- Retirement planning
- Financial rights and responsibilities
It also provides financial tools like a budget planner and financial calculators to help you with goal setting, mortgage planning, or tracking expenses.
Talk money
Starting in 2021, the FCAC launched the National Financial Literacy Strategy to promote financial literacy and resilience among Canadians. Each year, during financial literacy month, the FCAC provides a theme of focus. This year, the theme is “Talk Money.”
Talk money is meant to encourage Canadians to start having conversations about money and to try and remove the stigma that still exists among financial discussions. Simply speaking about money can begin to build financial confidence, which can lead to more positive financial outcomes. Speaking about money can make you feel less alone in your financial challenges and help you find the advice you need to move forward.
As you improve your financial education, you can share your money knowledge and resources with the people you love.
Gamify finances
With different financial apps, online games, and old-school favourites like Monopoly, Life, and PayDay, you can make learning and talking about money fun. Use a family game night as your jumping-off point to discuss concepts like budgeting, delayed gratification, and saving for the future. If you want to start teaching your pre-school children about money, you can do something as simple as playing store.
Work with a professional
If you’d like some support in increasing your financial education before you share with your family, speak to a professional. If you need help with investing, saving for retirement, or planning for your future, you can speak to a financial advisor. A not-for-profit credit counsellor can help you understand how to create a budget or improve your credit. If you need help dealing with debt, a Licensed Insolvency Trustee (LIT) can help you find a solution.
Improve Your Financial Well-Being: Speak to a Licensed Insolvency Trustee
If debt is stressing you out, you’re not alone. Thanks to factors like a high cost of living and rising credit card debt, household debt in Canada is increasing. If you’re ready to improve the financial well-being of you and your family, we can help! Licensed Insolvency Trustees are debt professionals. We offer the widest-range of debt relief options from credit counselling to Consumer Proposals, and Personal Bankruptcy. For a free, no-obligation consultation, call us at Debt repayment 1-888-371-8900 or complete our online contact form.
