With all the discussion about the need for enhancements to CPP, the reason behind it is the motivation for this blog topic. It is widely believed that many Canadians struggle with financial literacy and don't take an active role in effectively managing their finances or saving enough to meet their retirement needs.
What is surprising is that Canada's average debtor may not be who we think. New data released by Statistics Canada and highlighted in the infographic associated with this post, suggest that those most in debt are well educated and think of themselves as quite financially literate. They aren't those with low income or little education. The data reveals that they understand the debt they have taken on and they believe they can afford to pay it off.
Canadian debt is on the rise with savings not in a place that has the feds or the provinces feeling that they couldn't help but intervene in the form of forced savings through the CPP enhancement. With November being Financial Literacy Month (FLM), it is an timely opportunity to remember that it is never to early to start discussions about the importance of money management and what financial preparedness entails.
When considering the money landscape, it has been reported that 1 out of 3 Canadians struggle to keep up with their finances and when we zero in on youth and money, 60% of youth report carrying some debt and one third owe more than $10,000. Credit card debt and student loans are the top two categories for Millennials.
The Financial Consumer Agency of Canada (FCAC) has a national strategy to help Canadians become more aware of the importance of financial literacy. They are inviting us to join the conversation on social media using the hashtag #CountMeInCA to share tips and to tell them what we're doing or what resources we're using to manage our money and debt responsibly as well as how we're saving for the future.
The FCAC offers a 4 step process for improving financial literacy:
1) Take the self assessment quiz. This short and free quiz helps to test one's financial literacy skills and reveals how you compare to other Canadians based on their responses.
2) Search on the Canadian Financial Literacy Database. It holds a range of financial topics related to budgeting, money management, saving, investing and more.
3) Take action and build a financial literacy "to do" list.
4) Participate in Financial Literacy Month.
Learning more about financial literacy and creating breathing room to save for the future starts with gaining knowledge and confidence through good money management and a strategic approach to debt reduction. With so many Canadians struggling to make end meets with pressing financial obligations, the idea of saving for the future often doesn't seem like a realistic priority.
As with anything that seems too much for one person to manage alone, seeking help and guidance with financial preparedness is no different. The FCAC website provides a list of questions to ask when looking for professional advice.
We're ready to answer your questions. For over two decades, we've been helping companies with their retirement savings programs along with ways to improve financial literacy in the workplace. We invite you to contact us. We're here to help so that you can focus on what you do best.
*source - Finance Consumer Agency of Canada
Dave Dickinson, B.Comm, CFP, CLU, CHFC
Experienced Benefits Specialist ready to optimize your group benefits and pension plans.