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It's Financial Literacy Month: Brush Up on Your Financial Skills Thumbnail

It's Financial Literacy Month: Brush Up on Your Financial Skills

Did you know November is Financial Literacy Month in Canada?1 Financial Literacy Month is a national campaign designed to bring more financial education to children and adults.

Whether you're a financial wiz or just learning the ropes, there are many ways to improve your financial literacy. Here are four to get you started.

Understand Your Spendables

One of the essential steps in ensuring financial success is understanding your monthly cash flow. This may sound simple, but your financial strategy's foundation is based on whom you owe, what you owe, how you save, and how you spend.

Taking a look at your cash flow doesn't have to be complicated. Here's how to ensure you're setting yourself up for financial success:

  1. First, calculate your gross monthly income. This could include your salary, investment income, child support/alimony, freelance work, or other income sources. Remember to calculate your net income, which is how much is left after taxes and other deductions.
  2. Speaking of priorities, consider your financial preferences and allocate accordingly. In addition to your regular monthly expenses, you might decide to increase your available savings or earmark money toward a large purchase such as a home or car. The important point is to decide what's important and make sure your cash inflow and outflow reflect those values.
  3. Finally, create expense categories for where your money is spent and track each expense. It's important to differentiate between wants and needs. You need to pay the rent or mortgage, but you want a new pair of shoes or a nice dinner out. By tracking your spending, you can determine whether your budget is aligned with your priorities or if you should make adjustments to meet your goals.

Check Your Credit Score

If it's been a while since you checked your credit score, now is a great time to see where you stand. Your credit score is an important metric when considering your financial health and will play a larger role when applying for loans, especially mortgages and car loans. If you have a higher credit score, you may qualify for lower-interest debt, saving you money.  It may also help you qualify for better jobs.

Resources we recommend for checking and to better understanding your credit report can be obtained by reaching out to TransUnion Canada or Equifax Canada.2

Reviewing your credit report is essential to ensure there aren't any mistakes or incorrect accounts assigned to you. Contact your financial institutions immediately if you notice something on your credit report that doesn't look accurate, such as a loan or credit card you don't remember opening. You can also file a dispute with the credit reporting agencies to report any false information you find.

Understand Your Investment Options

As you become more financially literate and feel comfortable talking about finances, you may consider looking into investments aligned with your goals. There are many different types of investments, and working with a financial advisor can help you understand your options. You may also educate yourself on some of the most common investment types, including:

  • Stocks
  • Bonds
  • Mutual
  • Funds
  • ETFs

Don't Be Afraid to Ask Questions

Talking about finances can be intimidating, but we all must start somewhere. This Financial Literacy Month, make it a goal to learn one or two new facts about finance and contact an expert who can help. You can turn to financial advisors and financial publications to get your questions answered without feeling naive or silly. There's no such thing as a dumb question when it comes to becoming more financially literate and secure.

Financial literacy doesn't come from making giant leaps but rather from taking one step at a time. Pick one of the options above and start yourself on the path to becoming financially savvy.

  1. https://www.canada.ca/en/financial-consumer-agency/campaigns/financial-literacy-month/about.html 
  2. https://www.canada.ca/en/financial-consumer-agency/services/credit-reports-score/understand-credit-report.html

Please consult financial, legal, or tax professionals for information specific to your situation. The information and material presented are general, may have changed since the published date shown, and should not be considered financial advice. LetsPlan.ca is published in Canada exclusively for residents of Canadian jurisdictions where our products and services may be legally offered. The services offered within this site are available exclusively through our Canadian advisors. While we often provide original content, Twenty Over Ten initially provided the subject matter for this post. It has since been edited, reviewed and approved by our Privacy and Compliance Officer. Advisors may only conduct business with residents of the province(s) in which they are licensed and registered.