The new year is upon us, and many find themselves resolving once again to improve their physical, mental and financial health. The first step in improving your financial health is to become financially literate. “Knowledge is power” is a very well-used cliché in the English language, but it is used often for a reason. 

Just like understanding the human body can help you understand how to live healthily, understanding finances can greatly improve your financial health. 

To empower Canadians to take control of their own financial health, the Canadian government has instituted November as Financial Literacy Month.

What is Financial Literacy Month?

Financial Literacy Month is an initiative between the Canadian government and various credit unions across the country with the goal of providing Canadians with accessible financial education. This November marks the tenth anniversary of Financial Literacy month where you’ve been given the tools you need to become financially literate from 2020 and beyond.

This accessible financial education provides Canadians with tips for debt management, budgeting, saving for retirement and an emergency fund, fraud avoidance and understanding various financial services. These are communicated through blog-style posts written by professionals, infographics and videos that appeal to learners of all types. You can even quiz yourself to see how literate you are!

Not only is the information free, but there are several tools available to you, such as budgeting planners, mortgage qualifying tools, retirement income calculators and much more. These tools are free to use and will do nothing but help you achieve your financial goals!

The government of Canada has made it easy to access these tools –  they can be found here.

Why do we need Financial Literacy Month?

The promotion of Financial Literacy is to attract Canadians to the tools and information collected by the government and Credit Unions. The last three generations to come of age (Gen-X, Millennials and Gen Z), did not come into adulthood during stable times. Among the many inter-generational problems this has caused, a decline in financial literacy is one of them. 

According to stats Canada, in 2014, 43% of Canadians preparing for retirement did not know how to save for it. When parents aren’t financially literate, they can’t teach their children, and so on and so forth. Another chilling statistic is that only 43% of Canadian men and only 31% of women consider themselves financially knowledgeable. This is why the Canadian government launched Financial Literacy month in November 2010. 

An informed public without the barrier of money ensures all Canadians have the opportunity to become financially literate!

How can financial literacy improve my life?

Financial literacy is incredibly important. Once you understand the basics, you’re empowered to make better financial decisions. From what credit options suit you best, to devising a budget that leaves you in a more stable place, taking the time to learn about finances can only improve your life!

When you understand what credit options are best for you, you avoid predatory creditors. This will positively affect not only the amount of money you pay back, but your credit score. As discussed in last week’s post, a good credit score opens doors to major financial goals such as homeownership. Being informed only benefits you!

Tips to take into 2021 and beyond

Track your spending

By tracking your spending, you get a better picture of where your money is going. Before you start your holiday shopping, make a budget and track every transaction you make. 

Your loved ones love you, not what you can buy them. Choose gifts based on what you can afford. Set a spending budget for gifts separate from your regular monthly budget, and ensure when added to your other allowed spendings you still have enough left over for monthly expenses the following month!

Budget realistically 

It’s tempting, especially when faced with resolutions to improve ourselves, to cut out everything that is not essential for our survival. Review what expenses are necessary for both your survival and your overall happiness. This doesn’t give you permission to buy everything you desire! However, it doesn’t mean you only have to buy food, water and shelter, either. Devise a budget that works for you and your family to take into the new year!

Research your credit offers

We’ve all gotten those letters in the mail, “you have been preapproved for x.” It may be tempting to apply for that credit card or line of credit, but you want to make sure you do your research. Avoid taking on more debt than you need. Many of these credit cards or lines of credit will have astronomical interest. Take that into account when deciding whether or not to apply for them.

Lastly, set up an emergency fund!

Not everyone will have the luxury to set aside three months expenses in case of an emergency. However, if you can afford to set some funds aside, you should. If 2020 has proven anything, it’s that you never know when something could happen. Having an emergency fund prevents you from having to rely on predatory practices described above. In addition, your mental health will benefit just knowing that you have a safety net!

Get financially literate today

If you’re unsure how to implement these tips in your life and would like to discuss it with a certified mortgage professional, give me a call at (705) 333-4338 or get in touch with me here!

Customer Service Numbers:

CMHC: 1-800-668-2642
Genworth: 1-800-511-8888
Canada Guaranty: 1-866-414-9109

ATB: 1-800-332-8383
B2B: 1-800-263-8349
BMO: 1-877-895-3278
Bridgewater: 1-866-243-4301
CIBC: 1-800-465-2422
CMLS: 1-888-995-2657
Optimum: 1-866-441-3775
Equitable: 1-888-334-3313
Connect First: 403-736-4000
Chinook Financial: 403-934-3358
First Calgary Financial: 403-736-4000
First National: 1-888-488-0794
Haventree: 1-855-272-0051
Home Trust: 1-855-270-3630
HSBC: 1-888-310-4722
ICICI: 1-888-424-2422
Manulife: 1-877-765-2265
MCAP: 1-800-265-2624
Merix: 1-877-637-4911
Marathon: 1-855-503-6060
RBC: 1-866-809-5800
RFA: 1-877-416-7873
RMG: 1-866-809-5800
Scotiabank: 1-800-472-6842
Servus: 1-877-378-8728
Street Capital: 1-866-683-8090
TD: 1-866-222-3456