November is Financial Literacy Month

What is Financial Literacy and Why Is It Important?

November is National Financial Literacy Month. Each year, McMaster’s Human Resources Services supports an educational initiative focused on strengthening the financial literacy of faculty and staff, empowering them to manage their money wisely and to understand their financial rights and responsibilities.

The concept of financial literacy is fairly simple. It is the ability to understand how money works, and to feel confident making the right decisions when managing your personal finances. Does this mean that you have to be a money expert to be financially literate? No! It simply means that you possess the knowledge to make the right financial decisions for your circumstances.

A 2019 report from the Financial consumer agency of Canada shows that Canadians have been struggling with financial well-being and literacy. 8% of Canadians are falling behind on their bills, up from 2% in 2014. About 1 in 6 Canadians say their monthly spending exceeds their income, and that they have to borrow money to pay for daily expenses. Only 49% of Canadians report having a budget, despite data showing that Canadians who budget are less likely to fall behind on financial commitments.

These numbers are alarming, and indicate a need for better financial education for all Canadians. Learning about personal money management will increase confidence in money handling, increase financial stability, and reduce the stress and anxiety associated with personal finances.