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 becoming debt free, starting a business, and planning for retirement.
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. In addition, instability in the financial markets and rising inflation rates are putting more pressure on individuals to be more careful about their finances. 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 financial literacy can help you elevate your financial position beyond what you thought was possible.