Financial literacy education for Canadian youth now

Financial Literacy

What is Financial Literacy?

From the Financial Consumer Agency of Canada (FCAC)

Financial Literacy as the ability of consumers to make informed decisions that will best suit their situation.

A financially literate person is someone who understands how the financial system works, how to manage their money and how to make choices that best suit their needs and income. A financially literate population helps build a strong economy, which in turn makes all our lives better.

From the Investor Education Fund:

Financial literacy is the set of skills and knowledge that allow you to understand:

  • The financial principles you need to know to make informed financial decisions, and
  • The financial products that impact your financial well-being

This means

  • Understand the key financial products you may need throughout your life – including bank accounts, mortgages, retirement savings plans and basic investments like stocks, bonds and mutual funds
  • Understand basic financial concepts like compound interest, investment return, risk, diversification and so on
  • Discuss money and financial issues – even if you don’t really like to talk about them
  • Make good financial choices about saving, spending and managing debt throughout your life: for example, when getting an education, starting a job, buying a house, starting a family, getting ready to retire and living out your senior years
  • Respond competently to changes that affect your everyday financial well-being – including events in the general economy like the recent collapse of financial markets, rising unemployment and the threat rapid inflation.