November is financial literacy month in Canada. The Financial Consumer Agency of Canada (FCAC) concentrates on the significance of building financial confidence in a digital economy. We all live in challenging times and financial literacy skills are more important than ever.
Fortunately, there are plenty of resources and materials on how to improve your financial literacy and money management skills. Do you want to improve these skills and master financial literacy? Here is what you should do.
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What Is the National Financial Literacy Strategy?
The National Financial Literacy Strategy is a program initiated by the Financial Consumer Agency of Canada (FCAC). This program should work till 2026 and aims to help Canadians build financial resilience in a modern digital world so that families and individuals can adapt and respond well to financial changes, vulnerabilities, and uncertainties. This program is meant to assist every Canadian consumer to benefit from an inclusive, effective, and accessible financial ecosystem.
This 5-year plan is important as we live in a challenging time and often face tough financial decisions. The pandemic has damaged the economic situation in many countries. Millions of consumers became vulnerable regardless of their education, background, or income. As a result, the National Strategy was launched to help Canadian citizens confidently make savvy financial decisions in tough times.
Steps on How to Boost Financial Literacy
Many people live from paycheque to paycheque in Canada as well as in other countries around the globe. Consumers often opt for payday loans Vancouver and in other cities to fulfill their urgent cash needs and get additional money for a couple of weeks. While it can be a suitable near-term solution, increasing your financial literacy skills will be more beneficial in the long run. Here are the steps you should make to achieve it:
1. Do The Research
You need to learn how to make smart financial decisions and choose what works best for your personal finances. In order to develop monetary skills, you should do some research on relevant resources. There is a wide choice of materials, books, articles, blogs, and platforms with updated information about personal finance. Using this data can be beneficial as you will obtain useful tips. You may use social media accounts or personal finance blogs to receive relevant information on this topic. For instance, you may try these financial blogs, books, and podcasts:
- Financial Recovery by Karen McCall
- The Total Money Makeover by Dave Ramsey
- Money After Graduation blog
- r/PersonalFinanceCanada articles
- Planet Money podcast
2. Learn About Banking Options
The next step is to understand everything about your banking options. It’s necessary to optimize the banking and your accounts. Learn what you can about your present account options, its monthly fees, investing opportunities, and the financial institution you turn to. Keep in mind that there is a difference between a Tax-Free Savings Account (TFSA) and a Registered Retirement Savings Plan (RRSP).
If you do some research you will be able to realize which plan works best for you at this point in your life. Each banking option has benefits and drawbacks so you need to review different options.
3. Start Budgeting
Having a budget is a must today. If you don’t have a monthly budget, it’s almost impossible to build a solid financial future and become financially independent. You need to understand where your income goes and whether there are categories you may lower in terms of spending.
Track your expenses to get a better idea of your current spending habits. You will be able to calculate your monthly costs and determine your needs and wants if you start budgeting. You may want to utilize a Microsoft Excel spending plan or a Budget Boot Camp online course for that.
4. Check Your Credit Rating
Have you received your free annual credit report yet? If not, you should hurry as not knowing your current credit score may lead to financial issues. Your credit rating plays a significant role in your personal finances.
This figure affects your ability to take out loans, use credit cards, get mortgages, and even land a well-paid job. TransUnion and Equifax are the two major Canadian credit agencies where you may get your credit report.
5. Prevent Debt
It’s also important to manage your debt and tackle it. You may feel overwhelmed with the number of debt payments you have. If you make a list of the debt categories and prioritize your expenses, you will be able to get rid of debt faster.
Have a strict debt consolidation plan or get free credit counseling to help you with this task. Whether you have a mortgage, a personal loan, or a pile of overdue utility bills, it’s much better to tackle debt each month rather than pay down finance charges and penalties.
To sum up, financial literacy is what young people and adults should learn about today. Canadians have multiple resources and free materials to help them improve their financial habits. Don’t stop learning.
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Stay motivated to explore new information about your personal finances, budgeting, money management tips, retirement savings, etc. Remember that continuous learning is the key to financial literacy and financial well-being.
Financial Literacy Programs and Tools
There are a variety of financial literacy programs and educational materials to help adults and students increase their financial skills and knowledge. You may select between Your Financial Toolkit, online learning programs providing financial information and tools for adults, the Financial Basics workshop to help young adults make smart financial decisions, and the Understanding Your Credit Report workshop.
You may also take advantage of online financial calculators and tools. They may be helpful for choosing a credit card or a bank account; the tools include mortgage and budget calculators. The website of the Government of Canada contains budget planners, online financial goal calculators, bank account comparison tools, retirement income calculators, as well as a credit card comparison tool.
The Financial Consumer Agency of Canada developed useful digital content, including infographics, banners, and videos to help people and companies promote consumer protection and financial literacy in Canada.
