Financial Literacy is defined as the knowledge, skill and confidence to make financial decisions – Task Force on Financial Literacy.
Let’s start with knowledge. There is no way to know all the ins and outs of financial management even when you live it every day. You don’t need to be a financial expert; you need to know where you stand financially. Know your interest rate, know your accounts and know your financial goals. The way we handle our finances is influenced by many factors, knowing our behaviours and triggers will allow the knowledge of what to do set in.
How about the skills? Not everybody is proficient in balancing a cheque-book, but if your expenses exceed your pay cheque, you are headed down a slippery slope. Budgeting is essential. It’s the one skill we can all do, it does not have to be elaborate, but it must always be current. Take steps in developing your budgeting skills by tracking your expenses, keeping receipts, and organizing your monthly statements.
Gaining confidence in your finances will come with paying attention to them. Open every statement, read every agreement, and track your money (no matter how little or how much). Weigh the pros and cons before using credit or making a big purchase. Read about financial management and find a budget template that works for you.
Part of our mission at Credit Counselling Services of Atlantic Canada is to educate. This is why we are an active participant in promoting Financial Literacy Month. It is our responsibility to promote the need for knowledge on your finances, to assist you in building your financial skills and to help you find the confidence you need to make your financial decisions.