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Do we, as Canadians, make good financial decisions?

We would each like to think we are capable of making fairly decent financial decisions, but in reality, do we?  An even better question is, would we recognize if we make a bad decision?  Or, would it go by unnoticed?  Do we understand enough about financial matters to accurately gauge our own success?  As the saying goes, sometimes ‘we don’t know what we don’t know’.

Individually some of us make excellent financial decisions and are very well versed in financial matters but as a whole, we Canadians still need some work.


The financial marketplace can be confusing.  Numerous financial acronyms, jargon and an ever changing variety of financial products and options can be overwhelming. 


We live in a consumer driven society. We can be careless about purchases, and we are too eager to take on debt without understanding the long term consequences.  We haven’t really nailed the concept of living within our means.


Although reading about or listening to financial information may seem like death by boredom to many, the reality is, we really NEED to understand some financial basics to understand and improve our overall financial well-being.


So what are we doing about it?  You may recall, in 2009 a task force on financial literacy was created by then finance-minister Jim Flaherty to help strengthen the financial well-being of Canadians through financial education. 


November was designated as Financial Literacy Month, and what started slowly has gained momentum each year.  The idea is for the national steering committee, financial organizations and planners to make a contribution to educate Canadians on financial matters, and ultimately improve their financial decisions. 


The concept of improving financial literacy has since evolved into the National Strategy for Financial Literacy – Count me in, Canada.  In an effort to help Canadians better manage their finances and make appropriate financial decisions, it is important for people to have access to the knowledge and skills needed to make these responsible decisions. 


In June 2015 Stats Canada reported that Canada’s debt to income ratio rose to 164.6%, its highest level on record.  On the flip side, Canada’s net worth is on the rise and our debt-to-asset ratio is still relatively low at 17.9 percent.  This implies the average Canadian household has also invested in some assets that are appreciating in value.  Bank of Montreal economist Benjamin Reitzes indicates “Though the debt figures are eye-popping, there’s reason for optimism beneath the surface.”


Raising awareness of financial literacy and the positive impact it has on people’s lives has been broken down into three goals:

  • Manage money and debt wisely

  • Plan and save for the future

  • Prevent and protect against fraud and financial abuse

As the November 2015 Financial Literacy Month has come to a close you may not be aware of the amount of resources circulating and available.  If you are a twitter user, search #FLM2015 or #CountMeIn and you will be able to find many financial resources shared throughout the past month.


Using the internet, you can access these resources on financial topics that matter to you:


Canadian Financial Literacy Database (Financial Consumer Agency of Canada – FCAC)


Count me in, Canada 


Get smarter about money 


Canadian Anti-Fraud Centre 


The sources above are credible, and while there are many other great resources out there, be cautious when searching for financial information on the internet.  The internet can be a great source of information, but as we all know it also has many sources of misinformation that can easily lead you astray.  Inaccurate financial information has a detrimental effect on Canadian’s overall financial literacy, and may do you more harm than good.  Make sure the source is credible and if in doubt, seek to validate the information from a reliable source and/or check with a trusted financial advisor who can clarify and help you make the best decision for you.

Link to column as it appeared in Elgin This Month December 2015 edition (page 27)

Stephanie Farrow, B.A., CFP., Stephanie has over 20 years experience in the financial services industry, a diploma in Financial Planning from the Canadian Institute of Financial Planning and Certified Financial Planner designation.  Stephanie has been writing a financial planning column for the local business magazine Elgin This Month since 2010.  Stephanie and her husband Ken Farrow own Farrow Financial Services Inc.  About our Farrow Financial Team.