Financial Literacy: Why it’s Important for Canadians to Take Note

To help recognize Financial Literacy Month in Canada, we asked Canada’s first Financial Literacy Leader, Jane Rooney, why financial literacy is so important.

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As Canada’s Financial Literacy Leader, what is the one message you are telling Canadians right now?

November is Financial Literacy Month (FLM) and during this time the spotlight is on the importance of financial literacy to the lives of each and every Canadian. It’s an opportunity to highlight all the great services and resources offered in communities across the country. The Canadian Financial Literacy Database lists FLM events that Canadians can participate in across the country.

 

Since it is Financial Literacy Month in Canada, what are some of the goals that Canadians should be thinking about this month?

As part of our work, we have identified three areas to help Canadians:

  • Manage money and debt wisely
  • Plan and save for the future
  • Prevent and protect against fraud and financial abuse

 

Helping Canadians prepare for retirement is a key focus at BlackRock. How can Canadians improve their Retirement IQ?

Canadians need to be aware of their retirement needs and to prepare as early as possible. The Canadian Financial Literacy Database provides Canadians with a comprehensive list of financial literacy resources, events, and tools and information from various financial education providers, including the public, private and non-profit sectors. There is a wealth of resources in the database for people planning for retirement.

 

What role do financial services organizations, such as BlackRock, have in helping Canadians improve their financial literacy?

Financial services organizations like BlackRock play an important role in helping to raise awareness around the importance of financial literacy, and to promote tools to help educate Canadians on planning for retirement and the foundations of investing. FCAC has developed neutral, unbiased materials available on our website including life events content aimed at helping people at key stages in their lives, like Planning for retirement. More collaboration and sharing helps us get the word out and encourage others to join the conversation.

 

What’s missing from the retirement conversation?

Canadians start saving for retirement later in life, likely because in their younger years they are focused on debt related to school, mortgages and credit cards. Of particular concern is that a relatively small proportion of Canadians know how much they need to save for retirement—a factor that reduces their capacity to plan effectively for retirement. Data related to age and retirement savings are particularly concerning. Only 43% of 60 to 64-year-olds who are not retired know how much they need to save for retirement. By this age, it may be too late to adjust savings to maintain a lifestyle. Planning for retirement needs to be done at a young age. There is need for greater understanding of products and services offered and Canadians need to be better equipped to ask the right questions to their financial professionals. That means there is still a need for financial literacy.

 

How do we get the next generation of Canadians engaged and interested in saving and investing?

We would like to see more young people learning about managing money in a fun and engaging way. Every day, FCAC’s Twitter and Facebook accounts share useful tips on how to better manage personal finances. Also, FCAC created a resource entitled The City, which teaches young people financial skills that they can carry with them throughout their lives. The sooner people start learning about money and how to manage it wisely, the better. Financial literacy is a life-long journey. No one agency or organization can do it all. Success depends on collaboration and coordination with organizations like BlackRock.

 

Jane Rooney is Canada’s first Financial Literacy Leader. Appointed in April 2014, Ms. Rooney works to coordinate financial literacy initiatives by collaborating with stakeholder groups across the country.

This material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are as of November 2015 and may change as subsequent conditions vary. The information and opinions contained in this post are those of the interviewee. They may be derived from proprietary and nonproprietary sources deemed to be reliable, but are not necessarily all-inclusive or guaranteed as to accuracy. The opinions do not reflect the views of BlackRock, Inc. and no warranty of accuracy or reliability is given to and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by BlackRock, Inc., its officers, employees or agents. This post may contain “forward-looking” information that is not purely historical in nature. Such information may include, among other things, projections and forecasts. There is no guarantee that any forecasts made will come to pass. Reliance upon information in this post is at the sole discretion of the reader.

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