What is Financial Literacy?
Financial literacy is the ability to understand and use various financial skills to maximize your financial standing. These skills include budgeting, saving, investing, and understanding loan agreements. Strong financial literacy skills can help support various life goals such as purchasing a home, saving for retirement, and running a business.
Facts and Figures
- Nearly 6 out of 10 Canadian adults (59.6%) do not have a good idea of how much money they need to save to retire when and in the way that they want.
- 55% of Canadians have unsuitable numeracy skills, which means that they may struggle with understanding written instructions that rely on charts, numbers and conditional statements.
Why is Financial Literacy Important?
In recent decades, credit, loans and investment instruments have become increasingly widespread throughout society. This has made it even more imperative for individuals to understand how to use them responsibly. Being financially literate can help avoid pitfalls such as unsustainable debt, poor credit, bankruptcy, housing foreclosure, and other negative consequences. No matter your current financial standing, taking control of your finances through budgeting and investing can help you grow your money beyond what you thought was possible.