Do you have a household budget?
Do you know how much you’ll need to save to maintain your lifestyle in retirement?
Do you know how to get your credit report?
If you don’t consider yourself particularly money-savvy, you’re not alone. Nearly two-thirds of Canadians taking part in the 2014 Canadian Financial Capability Survey (CFCS) rate their own financial knowledge as poor.
The CFCS tests people’s financial know-how in five basic areas: keeping track, making ends meet, planning, staying informed and choosing products. The 2014 survey found that fewer than half of Canadians bother to take the most important first step in personal financial management—making a household budget. In fact, the number of people who do has gone down since 2009.
While almost 70 percent of those surveyed said they have no problem keeping up with their bills, three in 10 struggle to make their regular payments, and six in 10 do not know how much money they’ll need to save for retirement.
There is some good news however: More parents are saving for their children’s post-secondary education today than five years ago, while the number of new immigrants who use TFSAs rose from 13 percent to 33 percent.
According to Financial Literacy Leader, Jane Rooney, “The lack of financial knowledge continues to be a problem. Statistics show Canadian households are dealing with record levels of debt and with chronically low rates of saving.”
Those interested in measuring their own financial literacy can use a self-assessment quiz on the website of the Financial Consumer Agency of Canada: ItPaysToKnow.gc.ca. The quiz shows the user’s strength or weakness in each of the five key areas, and compares the results to those of other Canadians.
Also on the site is the portal to the Canadian Financial Literacy Database, which will guide you to resources and tools to improve your knowledge about money.