Being money savvy is paramount, now more than ever.
Before the pandemic, we were indebted. Throughout the pandemic, our debt got worse. According to Statistics Canada, Canadians owe $1.77 for every dollar of household disposable income earned.
Young people are graduating laden in debt, patching multiple gigs together to create a living wage and relying on parents for down payments.
Canadians need policies and systems in place that take our behaviour when it comes to money into account and find a way to provide teachers with the right supports to teach financial literacy effectively in schools.
Teens and young adults should be learning how to save for both long-term goals and unforeseen emergencies as early as possible. It’s obvious that more financial literacy in schools is long overdue and sorely needed.
Financial literacy among adults is abysmal. The federal government quizzed our financial capability on topics such as debt and banking fees in 2014 and only three per cent of participants answered all 14 questions correctly.
One way to better financial literacy is through school, starting as early as elementary school. A benefit of this approach is that it provides everyone with the opportunity to develop financial literacy, regardless of their families’ income or wealth.
Prior to the Ontario government’s revamped math curriculum in 2019, Ontario elementary school teachers were expected to make connections to financial literacy in all subjects in Grade 4, but how they did so was largely up to the teacher.
With that approach, teachers were relying on free, online resources, which are made or paid for by banks or other financial institutions. Materials made or paid for by financial institutions are more likely to focus on individual responsibility over social circumstances, like a pandemic, especially since banks make money through debt and credit.
Focusing on individual responsibility without discussing social factors is likely to diminish the importance of these lessons for students whose circumstances make it difficult for their family to save money and avoid debt.
The importance of recognizing social factors that can affect personal finances is mentioned in Ontario’s new financial literacy curriculum, and the province provides resources for teachers in this area.
However, it’s ultimately up to the classroom teacher to implement curriculum expectations and use the resources they have. Teachers frequently adapt resources to their classroom context.
That’s why government investment in financial literacy through professional development for teachers is necessary to improve their comfort and capacity with financial literacy education.
Without more detailed guidance and professional development, teachers may continue to rely on freely available online materials, whether or not they are recommended by the Ministry of Education, potentially to the detriment of financially vulnerable students.
Students of all backgrounds, regardless of their current financial circumstances, can benefit from learning about money management skills in elementary school.
More than simply including financial literacy in the core curriculum will be required to achieve this goal. Teachers must be provided with the necessary resources to accomplish this. Teachers will feel more at ease teaching financial concepts if they have access to ongoing professional development opportunities.
As a result, all students will have the financial literacy they need to deal with the next crisis to the best of their abilities.
However, bad financial decisions are around every corner with Canadians facing more financial products, more spending and investment choices, more risks and more fraud.
While more financial knowledge will help, it won’t prevent Canadians from being preyed upon in scams and fraud. More than 30,000 Canadians have been victims of fraud this year. That equates to $144 million stolen from Canadians’ bank accounts.
The introduction of money concepts in Ontario schools should serve as a prompt to help students become financially literate and build a defence against fraud. However, systemic changes are also required to nudge people to make better decisions.
We need policies and systems that take our financial behaviour into account, such as simpler processes for enrolling in workplace retirement plans.
If we want our generation to be financially empowered, there needs to be a deeper dive into topics such as how to pay bills and taxes. The next step that needs to be taken is to institute post-secondary financial literacy courses since students are ripe to learn real-world lessons while in post-secondary education.