Why schools should teach financial literacy early

Why schools should teach financial literacy early

The importance of teaching financial literacy early on to kids cannot be understated.

In this article we’ll look at why financial literacy matters now more than ever before, especially for children early on in their development.

Financial Literacy Helps Us Better Prepare for Financial Emergencies

The COVID-19 pandemic has been tough on the finances of Canadians.

You may be fine for now, but what happens when interest rates start rising? With roughly half of Canadians living paycheque to paycheque, many Canadians could find it tough to pay the bills when higher rates arrive, likely as soon as next year.

Could you pay your bills if your debt payments went up by $50, $100 or $200 per month?

Strong financial habits couldn’t have prevented the COVID-19 pandemic, but it could have helped make it a lot better from a financial perspective.

Families could have created an emergency fund, giving them the option of dipping into savings set aside for a rainy day instead of having to rely on debt. Strong budgeting habits also help you to track your expenditures and find extra money to put towards your needs.

Sadly, only about half of Canadians have a budget, according to the Financial Consumer Agency of Canada. If taught early in on school, these statistics may be much higher, with households implementing strong budgeting techniques into their daily lives.

Financial Literacy Helps Us Learn How to be Better Savers

It’s easier than ever to spend money these days. Temptation is everywhere. These temptations didn’t exist a couple decades ago.

There weren’t advertisements on social media and in-app purchases back then.

Being financially literate means setting financial goals and saving money. By learning the technique of “paying yourself first,” you can help improve your chances immensely of reaching those goals.

When you pay yourself first, the money you want to save is automatically squirreled away into a savings account before you’re tempted to spend it. That way you can spend money without feeling guilty because your savings goals have already been achieved. That leads us into the next step…

Financial Literacy Helps Us Become Better Investors

Did you know that many believe the only way to grow your money is through savings accounts?

The truth is, there are many ways and vehicles to use to make your money work for you – be it stocks, bonds, GICs, TFSAs, RRSPs, Mutual Funds or RESPs.

It’s important to know how these tools can help you build towards a brighter future, especially when pensions are quickly becoming a thing of the past.

Only 37.1% of Canadian workers had pension plan coverage in 2019. For everyone without a pension plan, we need to learn to grow our money and unless we have basic investing skills or know who to rely on, our money may not grow as quickly as it needs to last us in retirement.

Financial Literacy Provides Valuable Transferrable Skills

Being financially literacy doesn’t just help you with your family budget. It can help you with your career.

If you work in the financial industry, being financially literate is a must. Someone who’s financially literate has a much better chance of advancing in their career than someone who isn’t.

You might be in accounting, marketing or HR. Not matter the department, your position likely requires some degree of financial literacy. If you have those crucial skills, your growth potential can be unlimited.

The Bottom Line

The children are our future.

If we want our children to be financially literate, the time to improve financial literacy is now.

School is the perfect time to teach our children about money. It helps to get through to them at a young age and teach them those essential financial skills they will need later in life.