November is Financial Literacy Month in Canada
Financial literacy is an important skill that needs to be honed by everyone, whether you are rich or poor.
Although financial literacy can assist in helping you manage your money, the subject is much broader, encompassing topics from understanding the Canadian banking system to fraud prevention.
Here are eight topics that you should consider taking a closer look at in order to improve your knowledge of financial literacy and associated skills.
1) Banking – Since banks are the source of cash deposits and withdrawals, consider informing yourself regarding personal accounts, online banking, deposit insurance and protecting yourself from bank fraud.
2) Budgeting and money management – Do you know where your money is coming from and going to? Are you consistently in debt? Budgeting and money management tips and tools are keys to helping you make good financial decisions and achieving your financial goals.
To improve this specific skill, obtain budgeting guides and sheets to record your expenses and ask for advice regarding your use of credit cards and bad spending habits.
3) Credit cards – Credit cards are fairly easy to obtain; however, they are very difficult to manage if not used correctly. Proper use of credit cards entails knowing which credit card is right for you, interest charges, service fees and reporting unauthorized credit card transactions.
4) Payment options and money transfers – Since we are gradually moving to a cashless society, knowing more about payment options and money transfers is essential. Some of the options that deserve your attention include credit cards, debit cards, pre-authorized debits, prepaid cards and virtual currencies.
5) Mortgages – Deciding to buy a house, condo or piece of property is a large responsibility due to the financial commitment made via mortgages. Learning more about mortgages can be time consuming; however, it may save individuals thousands of dollars in the long-term. The essentials that a first-time buyer should know include renegotiating your mortgage agreement, paying off your mortgage faster, borrowing on home equity and understanding reverse mortgages.
6) Credit and loans – Credit and loan products, such as lines of credit and personal loans, are ways that you can borrow money to pay for goods and services. Responsible borrowing can help you build a good credit history, but using credit to spend beyond your means is dangerous. To be a better manager of credit and loans, familiarize yourself with good debt versus bad debt and the different types of lines of credit and loans.
7) Savings and investments – In order for your money to work for you, you must have a good sense of the basic savings and investment vehicles that financial institutions can offer. Before sitting down with a financial advisor, examine the following type of savings plans and investment tools: guaranteed investment certificates (GICs) and treasury bills, high interest savings accounts, tax free savings accounts, mutual funds and exchange traded funds.
8) Fraud – Fraud can take many forms, such as identity theft, fake emails or websites that trick you into providing personal financial information. Victims of fraud often suffer financial losses and have to spend time trying to clear their financial records. The specific types of fraud that you should be on the lookout for are Identity, debit card, credit card, email and phone.
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