What is Financial Literacy Month?
Financial Literacy Month – a Review of Canada’s efforts
What is “financial literacy” and why is the whole month of November designated to it?
And what are government, the banks and the private sector doing to promote and assist with the financial literacy of its citizens?
The dedication of November as Financial Literacy Month is thanks to James Rajotte, Member of Parliament (Edmonton–Leduc) and his Private Member’s motion M-269, which was passed in the House of Commons in March 2012 by a vote of 269-3.
When you Google “financial literacy month” in Canada, this website comes up first:
This is FLAG, the Financial Literacy Action Group, formed by seven non-profit organizations to assist and improve the financial literacy of Canadians:
- ABC Life Literacy Canada – a non-profit organization that inspires Canadians to increase their literacy skills.
- Canadian Foundation for Economic Education (CFEE) – a non-profit, non-partisan organization that works to improve economic, financial, and enterprising capability.
- Credit Canada Debt Solutions – A non-profit charity helping people get out of debt and lead financially healthy lives since 1966.
- Financial Planning Standards Council (FPSC) – a not-for-profit standards-setting and certification body that develops, promotes and enforces professional standards in financial planning through Certified Financial Planner® certification — the gold standard for financial planning in Canada. FPSC’s purpose is to instil confidence in the financial planning profession.
- Investor Education Fund (IEF) – develops and promotes unbiased, independent financial information, programs and tools to help consumers make better financial and investing decisions. It was established as a non-profit organization by the Ontario Securities Commission (OSC) and is funded by settlements and fines from OSC enforcement proceedings.
- Junior Achievement – the largest youth business education organization in Canada.
- Prosper Canada (formerly Social and Enterprise Development Innovations) – a national charity dedicated to expanding economic opportunity for Canadians living in poverty through program and policy innovation.
FLAG’s site also points you to a federal government site, the Financial Consumer Agency of Canada (FCAC).
Government Initiatives for Financial Literacy Month
The FCAC says:
“November is Financial Literacy Month (FLM) in Canada, and FCAC is proud to play a role in raising awareness and mobilizing organizations across Canada to take part.”
FCAC defines “financial literacy” as “having the knowledge, skills and confidence to make responsible financial decisions.” This definition came from the Canadian Task Force on Financial Literacy, struck by the late Jim Flaherty and co-chaired by BMO’s Jacques Ménard. In its final 2011 report, the task force suggested that four elements are fundamental to Canadians achieving financial literacy:
- Knowledge — the understanding of personal and broader financial matters.
- Skills — the ability to apply that financial knowledge in everyday life.
- Confidence — the self-assurance to make important decisions.
- Responsible financial decisions — the ability of individuals to use the knowledge, skills and confidence they have gained to make choices appropriate to their own circumstances.
But what does all of this really mean? The FCAC gets more specific:
“Being financially literate can help Canadians to:
- decide how they will spend their money and meet their financial obligations;
- make sense of the financial marketplace and buy the products and services best suited to their needs;
- manage their personal finances and plan ahead for life events, such as home ownership or retirement;
- ask and understand how they can benefit from local, provincial and national government programs and systems;
- assess the financial information and advice they receive from relatives and friends, professionals or the media; and,
- maximize the use of the resources they have access to, including workplace benefits, private and public pensions, tax credits, public benefits, investments, home equity, and access to credit.”
Those sound like good ideas: good spending and bill paying habits, how to make good banking choices, how to plan ahead, how to get money from the government and how to assess advice.
In addition to the regular social media information, the site features a “calendar of events,” a Canadian Financial Literacy Database with 1,832 events and a “Financial literacy self-assessment quiz.” The instructions promise that it takes only 8 minutes. The answers for each topic feature a button that leads to a search result with hundreds of events to look through, most of which are unfortunately not helpful.
For example, if the result features an online resource, often there is no link to it, like the one at “A Little Guidance Makes it Easier to Buy Your First Home.” This format proves to be overwhelming and frustrating. Perhaps putting all the choices in a one month calendar grid – like Google Calendar – would simplify searching.
But the government’s intentions are honourable. Jane Rooney, Canada’s first Financial Literacy Leader, whose job is to help ensure Canadians are fully equipped with the knowledge and skills necessary to make responsible financial decisions, will announce tomorrow with Kevin Sorenson, Minister of State (Finance) a new financial commitment to support the financial capability of vulnerable Canadians. Ms. Rooney began her new job this year with a budget of $3 million and a focus on senior citizens.
What are the banks doing for Financial Literacy Month?
RBC does not have anything specific to the November’s theme, but it does have its RBC Advice Centre that has basic advice on personal and business finances.
CIBC has a page “the 1, 2, 3s of financial literacy” but again, nothing specific to Financial Literacy Month. Quite disappointing.
Scotiabank launched its financial literacy page in November 2012, but also doesn’t have anything new for this year.
TD Canada Trust has an Education and Financial Literacy page, and a Financial Literacy page that boasts about their work with “underserved communities”, including a co-founding and sponsorship of prospercanada.org, but again, doesn’t have any specific Financial Literacy Month information.
BMO is the only major bank that has a news release about Financial Literacy Month! BMO also has a financial literacy page.
President’s Choice Financial has nothing about financial literacy.
Tangerine has a blog post from president Peter Aceto in 2012.
VISA has its Practical Money Skills website.
Overall, it’s a less-than-exciting display of information from the government and the banks.
Onto the private sector….
While there are actually no private initiatives for Financial Literacy Month in Canada, there are a number of excellent resources to become financially literate.
Gail Val-Oxlade provides a great start to increasing your financial literacy. She also has her website My Money My Choices that puts your increasing knowledge into action. As Gail suggests, “It doesn’t matter how much you know, if you aren’t using what you know, you aren’t financially literate.”
Robert Kiyosake‘s “Rich Dad, Poor Dad” is a staple of financial literacy. His company also provides a CashFlow board game (iPad version, too), courses and mentorship:
Don’t forget “Personal Finance for Dummies.”
Suze Orman has many books, including “The Money Book for the Young, Fabulous & Broke.”
Of course, there is The Wealthy Barber.
Jonathan Chevreau’s blog: Get Smarter about Money.
And lastly, check out this great post from Financial Highway: 5 financial gurus you’ve never heard of.
To summarize, it seems that while the intentions of November’s Financial Literacy Month are good, the execution by government and the financial sector have considerable room for growth and improvement. Initiatives for the month by the private sector need to be encouraged beyond the staples of books and blogs.