Skills, knowledge and confidence: that’s what the new national strategy on financial literacy aims for. The strategy, called Count Me In, includes more than 50 new initiatives geared to give Canadians a boost in coping with their financial well-being.
Confronting the scariness of financial dealings isn’t a new concept. In 1910, Canadian humorist, Stephen Leacock, published My Financial Career as a short story, and in 1962 the National Film Board of Canada turned it into a popular award-winning animated short, which still resonates today. Even after 105 years, and despite the efforts of The Task Force on Financial Literacy with its research, reports and consultations, the dread of financial interaction is as potent as ever.
Financial literacy is a vital life skill. Most financial literacy proponents recognize it as essential as reading and writing. Developing an understanding of how to manage money helps young people prepare for a secure future and allows seniors to maintain their standard of living, and influences all the stages of life in between.
Count Me In touches on three financial literacy goals:
- To empower people to manage their money and debt wisely.
- To help them plan and save for the future.
- To protect people from financial fraud and abuse.
The 52 initiatives in the plan, so far, take the form of websites and podcasts with educational resources for students, seminars and workshops for seniors, and boot camps aimed at those in debt. Count Me In counts on the support and cooperation of not only government organizations but also not-for-profit organizations and financial institutions, and relies on them to keep the interests of the public in mind rather than their own interests.
The strategy is just launching and its progress will be measured and refined over the next five years, which for people in financial distress is an eternity.
A concerted effort to enhance financial literacy would especially be a boon for the young. They often don’t know where to turn for good unbiased advice, and many of their parents aren’t any more knowledgeable than they are about financial matters, nor are their teachers. Financial literacy isn’t in the curriculum of most schools across the country. If Count me In could create the appropriate standardized content that could encourage habits, it’s believed those behaviours would be embedded for life. It is the simple things in life young people need to know about as well. The young men in my life had to be taught how to write a cheque and pay their credit cards. You aren’t born with the knowledge, even if you do have savvy parents.
The skills, knowledge and confidence that come with financial literacy give you the tools to make your own decisions. You don’t have to rely on the suggestions of those who want to sell you products and advice that might not suit you. With the proper information and background, you yourself will sense when and how it is right for you to buy a car or a house, or know how to find the best rates and financial products for you.
Self-reliance lets you, rather than somebody else, determine your financial choices. Financial literacy isn’t about investing in the stock market. It’s about managing risk and putting a plan in place to take care of yourself and your family. As you accomplish financial goals, you want to tweak your knowledge to evolve as your family needs change. It is not a destination, it’s a journey.
Canada is the latest of 50 countries that have implemented financial literacy programs. The 21 finance ministers of the Asia-Pacific Economic Cooperation (APEC) Pacific Rim member economies consider financial literacy to be “an essential skill for everyone in the 21st century”. Australia is regarded as a leading player in the financial literacy field and plays an active role in contributing to relevant international thought on financial literacy. The Australian National Literacy Strategy launched in 2011 and re-launched in August of 2014 is an obvious model for the Canadian strategy.
Since 2011, Australia has gained insight into ways to positively influence financial decision-making.
- Engage people when they are contemplating change or ready to make a decision.
- Address immediate benefits. Immediate benefits are easier to relate to than more abstract long term benefits. Teach young people how to buy their first car or their first house. Teach older people about retirement.
- “Teachable moments” can open the door for further financial awareness. Expanding knowledge helps people increase their personal resilience so that they are better able to avoid financial crisis or stress, and develop a greater capacity to rebound from financial problems.
With Count Me In, Canada is catching up in the world of financial literacy. If the strategy flourishes, it will achieve the goal of strengthening the financial well-being of Canadians and their families. If it languishes, just like the young man in the Stephen Leacock story more than 100 years ago, this generation of Canadians might once again keep their money in cash in their trousers pocket and their savings in a sock in a drawer.