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How financial literacy can help us through difficult times

Being financially literate is crucial whether you’re going through a divorce, job loss, or another difficult time. Making smart, effective financial decisions can help many people stretch their dollars further and avoid taking on huge amounts of debt.

However, being financially literate is a skill set lacking in half of Canadians. With four in 10 Canadians reporting that money is a daily concern, and a third of low-income Canadians worry about money almost constantly, financial literacy is a vital skill everyone needs.

Now is as good a time as ever for adult learners to acquire or increase their financial literacy skills.

The Importance of Financial Literacy

Being financially literate gives people the confidence to make informed decisions about their personal finances and create a stable financial life. Even those with adequate financial literacy skills may struggle to make ends meet, which means it will be even more challenging for those without the right skills.

Although being able to budget and manage money effectively is always important, it’s even more so during times of unemployment or reduced work hours. Without financial literacy, individuals risk making ineffective financial decisions, increasing debt, and becoming victims of abusive financial practices.

“Having strong financial literacy skills during challenging life events is extremely important,” says Alison Howard, Executive Director of ABC Life Literacy Canada. “These skills will give people the confidence to contact their bank and ask for a mortgage deferral, practice smart shopping after receiving a government benefit, and identify online financial scams before it’s too late.”

Financial Literacy is Needed Everywhere

Financial literacy is essential in nearly every aspect of our lives, from managing a reduced income to grocery shopping. To become financially literate, a foundational knowledge involving the following four fundamental pillars is necessary:

  1. Budgeting: Depending on how often you receive income, having an effective budget helps your dollars last longer without using credit cards or loans.
  2. Saving: Saving money makes it much easier to afford large investments such as a car, a home, post-secondary studies, and retirement.
  3. Investing: Your money can make more for you – if properly invested.
  4. Debt: Knowing the difference between good and bad debt can help you make the right choices when borrowing money.

Financial Literacy Programs

The world of finance can be intimidating to many. But with the proper resources, anyone can become financially literate.

ABC Money Matters is a free, introductory financial literacy program for adult learners that helps provide financial knowledge through workshops and online resources. Visit abcmoneymatters.ca today, or contact us for help setting up a Money Matters workshop.