What is financial literacy?
Do you have a good grasp on financial literacy? In Canada, November is Financial Literacy Month. This campaign is led by the Financial Consumer Agency of Canada (FCAC) each year and is designed to help Canadians better understand and control their finances. In a world with ever-changing economic trends, rising costs of living, and global uncertainty, it’s very important to feel financially confident. So, what exactly does it mean to be financially literate? Here’s what you should know about this term, and the resources Financial Literacy Month provides to help you navigate today’s landscape.
What does financial literacy mean?
Financial literacy is all about having the knowledge and understanding needed to make informed decisions about your money. A person who is financially literate is able to properly budget, invest, manage debt, and keep track of their income and expenses. Having this kind of knowledge helps prevent people from making costly errors or unwise financial decisions. We all face financial challenges throughout our lives, so it’s important to know how to deal with them. Some of these challenges include understanding credit, budgeting, retirement planning, and purchasing a home. Without a solid understanding of these concepts, people are more likely to make poor financial decisions that impact their long-term wellbeing.
How can you improve your own financial literacy?
There are many ways for you to improve your financial literacy! You might already feel confident in your knowledge, or you might think you’re far behind. In any case, it never hurts to absorb more information and continue learning. One of the simplest strategies is to look for financial resources that speak to you. You can access endless online courses, websites, podcasts, and magazines dedicated to financial literacy. Take some time to think about the concepts that matter to you most.
Understanding your own spending habits is another important part of financial literacy. You should track your spending so you have an idea of where your money is going each month, and how much you are spending. This helps you identify potential areas where you can cut back and make an effort to save. There are several budgeting apps available to help simplify this process for you.
Finally, it’s a good idea to learn a bit about your credit score and where it stands. Scores above 650 are generally considered ideal, as this indicates you are a responsible borrower with a solid payment history. You can find your credit score on Equifax or TransUnion, and on many personal banking websites. Knowing your score will help you determine how creditworthy you are, and whether you should make any changes to your habits.
Financial Literacy Month resources
The Government of Canada’s website has a whole section dedicated to Financial Literacy Month and what it offers. You can look into resources that discuss managing money, home buyer programs, budgeting tools, and more. These are all items that will improve your financial understanding and confidence. If you are unsure where to start in your journey towards financial literacy, we recommend checking out this page and browsing through all the information available to you!
We live in a consumer-driven world where credit cards, loans, and debt are everywhere. Financial literacy is essential to prevent overspending and help you live comfortably within your means. You don’t need to be an expert in all things related to finance, but a solid understanding of the basic concepts will allow you to make the best decisions for you. This will help you ensure your financial future and feel confident in today’s economy.
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