Why Financial Literacy is an Imperative Life Skill

Financial Literacy (definition):
1) The ability to make responsible financial decisions.
2) The education and understanding of various financial areas including personal finance, money, borrowing, and investing.

 

Whether deciding if you should go out for lunch again this week, if you can afford to put your youngest child in hockey, or what strategy to take for a long-term investment, financial literacy plays an integral role in everyone’s daily life. 

 

Yet the way we shop and spend has changed over recent years. With previous generations spending only the cash in their pockets and making due with what they had,  today’s digital era of online shopping, electronic money transfers, and paying one credit card off with another lies inherent. And without educated financial skills, it’s easier than ever to overspend and wind up in debt. 

 

Money is the energetic currency of the world and a lack of understanding about individual and family finances can cause a volcanic domino effect that oozes over every aspect of your life. Balancing budgets, saving for college, planning for retirement… Nothing is untouched.

 

If you’ve ever been in crippling debt or caught in the web of poverty, then you’ll understand how difficult it can be to get ahead. When struggling to keep afloat, you can’t just bury your head in the sand and simply hope things improve. It takes laser focus, detailed money management awareness, and efficient organizational skills to go from barely surviving to truly thriving. 

 

That’s right. It takes financial literacy skills.

 

By educating and empowering our youth with the tools necessary to make wise financial decisions from a young age — or ANY age (because it’s never too late to start!) — we can help break the cycle of poverty and teach people how to make better decisions when it comes to money. 

 

This year’s new agenda for Ontario schools to teach financial literacy skills to those in Grade 4 to 12 is a welcome curriculum addition — and a great opportunity to open up conversations about debt and financial health within the community. This may also help break the stigma and encourage anyone who is struggling with finances to come forward and seek help. 

 

As they mature, these teachings will positively impact students’ smaller everyday decisions, like buying groceries within a set budget to paying rent on time and maintaining a car and further improve their abilities to identify larger long-term investments. 

 

Just as important, teaching money matters to our youth will enable them to fix financial mistakes when they occur and plan for a better future with confidence, so they can create a better life for themselves and their families. 

 

Financial literacy transforms lives. 

 

Tell us, how has financial literacy improved your life? What advice would you give someone looking to advance their money management skills?

 

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For more information about Ontario financial literacy education, visit http://www.edu.gov.on.ca/eng/surveyliteracy.html