How Financially Literate is the Average Canadian?

Author: K&E Professional Accounting Associates | | Categories: canada , financialliteracy , investment , Savings , wealthmanagement

Accounting Firm in Winnipeg

Two independent studies, the 2019 Canadian Financial Capability Survey (CFCS) and the Canadian Bankers Association Survey (CBAS) show that very few Canadians can be considered Financially Literate.

The surveys found that people who made use of financial planning services were more financially literate overall. Financial planners assist people with meeting their financial challenges now and to plan for future expenses and retirement. They can help you develop a strategy to make your money work for you through: setting saving goals and strategies, tax planning, retirement planning, as well as will and estate planning and setting up trusts for those left behind. As a trusted advisor, financial planners can also help to increase your financial literacy by explaining in lay man’s terms what financial terms mean and how they will affect your finances.

In response to the federal government’s increasing awareness of the low financial literacy of Canadians, in June of 2015, they launched a National Strategy for Financial Literacy entitled “Count Me In, Canada”. It is their hope that this endeavour will increase financial literacy in Canadians overall. Through their consultations, they discovered the diversity of financial literacy that was required by Canadians and that they needed to address this need with education offered in the places that people spent the most time, such as: schools, workplace, senior centres, etc.

In 2019, the Federal Government assessed the progress of their strategy and found that 46% of Canadians plan for unexpected expenses. As a result, they discovered that Canadians who save are much more financially resilient than those who don’t. From the CFCS, they also discovered that 47% of Canadians live on a budget and of those 93% stay within their budget.  Those Canadians who had experienced a financial literacy intervention began budgeting and kept up with their financial obligations post financial literacy training. With it being only 4 years into this initiative, a significant amount of progress has been made. For more information on how you too can develop your financial literacy, visit https://www.canada.ca/en/financial-consumer-agency/programs/financial-literacy.html . Please share this link with all those who need to increase their financial literacy.

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