Financial Literacy Newsletter - July 2018

From: Financial Consumer Agency of Canada

Compare and calculate your way to financial confidence!

A word from the Leader

Welcome to the July edition of the Financial Literacy Newsletter. Summer is here, which means that you may be planning some sort of holiday or “staycation” to relax, spend time with friends and family, and (hopefully) enjoy some beautiful weather.

Having some down time can also give you a chance to reflect on your personal finances and review your budget. We know from surveys that summer can be a time of overspending – on leisure activities, travel and additional child-care and camp costs. It’s always best to have a plan in the form of a budget, and to keep your spending within your means. Otherwise you may be facing unwelcome debt come fall.

In fact, a budget can be the cornerstone of a solid financial plan. Once you know what you can afford, consider planning a staycation, doing day trips to provincial or national parks and joining in free community activities. Or consider a longer visit to a national park or historic site – all will have free admission days this summer, in addition to Canada Day.

Whatever you do, don’t take a holiday from paying down your debt. Canada’s debt-to-income ratio started to edge down from an all-time high earlier this year, but it’s still hovering at 170 per cent, according to Statistics Canada. This could be bad news for households carrying high debt, if interest rates continue to inch upward, as they are expected to.

To help you make and stick to your plan, you can find a wealth of unbiased FCAC tools and resources online. These include very useful financial goal and budget calculators and our popular credit card and account comparison tools, which can help you choose the best products for you. You can also find a wealth of resources if you are struggling to pay down debt. If you take a bit of time this summer to learn more about managing your money, you can enjoy your hard-earned holidays without worrying about how you’ll pay for them.

This month, we have some interesting articles to share with you on deposit insurance and a financial literacy bootcamp for youth.

If there’s something in this newsletter that you enjoy, please share it with your network, and remember to connect with us on social media via our Facebook and Twitter accounts – we’re also on YouTube and LinkedIn.

Happy Reading!

Jane Rooney

Financial Literacy Leader

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What’s new

FCAC Resources:

Mark your calendar:

  • Nov 26 to 27: FCAC’s Research Symposium in Toronto
  • Find events the financial literacy community is participating in across Canada in the Canadian Financial Literacy Database (or submit your own!)
  • Start planning for Financial Literacy Month 2018: This year’s theme is Invest in your financial well-being (Contact us for more information.)
  • CPA Canada, in cooperation with CPA BC, will be hosting their second annual Financial Literacy Conference, Mastering Money, on November 22 to 23, 2018, in Vancouver, British Columbia
    • This year’s theme – Education to Action – focuses on transforming knowledge into skills and behavioural changes

Protecting your hard-earned savings

If you’ve been to a bank branch in Canada in the last few months, you’ve no doubt seen a new purple decal (sign) on the main doors to your branch. But do you know what this sticker means? It signifies that the institution is a member of the Canada Deposit Insurance Corporation (CDIC).

But just what is CDIC? In formal terms, CDIC is the federal Crown corporation that contributes to the stability of the Canadian financial system by providing deposit insurance against the loss of eligible deposits at member institutions in the event of failure. It is also the resolution authority for all of its members, from the smallest to the largest. In general terms, that means that, should a CDIC member fail, CDIC’s role is to resolve the failure in a manner that protects deposits, maintains the flow of financial services and helps protect Canada’s economy.

Now you may be thinking, “Banks don’t fail, so why do we need deposit insurance?” Great question. Since CDIC was created in 1967, 43 of its member institutions have failed, affecting some 2 million Canadians. But depositors did not lose a single dollar under CDIC’s protection. While there hasn’t been a failure in 20+ years, you never know when it could happen again.

CDIC protects eligible deposits in personal and joint accounts, GICs and other types of financial products, up to $100,000 per deposit category at each of its 80+ member financial institutions. Investments like stocks, bonds or mutual funds are not protected by CDIC. Check the list at CDIC.ca and find out if your bank is a member!

Research has shown that only about half of Canadians are aware of CDIC and its program. CDIC is working hard to reach and inform as many Canadians as possible about deposit insurance, so that they may make informed decisions about their savings. In addition to a national awareness campaign, CDIC has a new logo, an updated look to the new membership sign, and an easy-to-understand brochure on display in all member bank branches.

CDIC also knows that the way we bank in Canada has changed – we use mobile apps, we bank online and we deposit cheques by taking a photo of them. To keep up with these changes in habits, CDIC members will be changing the way they provide deposit insurance information to their clients in the coming months. These changes will result in members displaying CDIC’s logo or information on their online banking sites, mobile apps and ATMs. There will also be more information and signage in-branch.

Whether you have $100 or $1,000,000 in the bank, CDIC knows that your money is important to you. To learn more about deposit insurance or CDIC, check them out online or follow them on Twitter, Facebook and YouTube.

FCAC’s 2017-2018 digital campaign to manage and reduce debt

In the past year, the Financial Consumer Agency of Canada (FCAC) ran a successful advertising campaign focused on raising awareness of the importance of managing and reducing debt.

The topic of debt reduction was chosen (in part) due to the high ratio of debt to disposable income in Canada, which reached a record of 170 percent in the third quarter of 2017. Statistics Canada announced last month that this ratio fell to 168 percent in the first three months of 2018, the largest decline since 1990.

As part of ongoing FCAC activities to educate Canadians about financial literacy, the Agency ran a digital advertisement campaign on platforms including Facebook and Google. Some of these advertisements included a series of videos about debt.

The videos at the centre of the 2017-2018 debt-awareness campaign were:

In addition to raising awareness about the importance of managing and reducing debt, FCAC also wanted to point Canadians to the resources we provide that can help them achieve their financial goals. And so, building on the success of the 2017-2018 campaign, FCAC has developed a second series of videos promoting our Consumer Education content, tools, and calculators. These free online resources are available to all Canadians to help them manage their money so that they can become more confident and informed consumers. FCAC’s tools include the Financial Goal Calculator, the Budget Calculator, the Mortgage Calculator, the Mortgage Qualifier Tool, the Credit Card Comparison Tool, and the Account Comparison Tool.

Take a peek at the new video series to help promote these tools and calculators:

The “Reach your financial goals” video features the Financial Goal Calculator, which is designed to help users create a realistic plan to get out of debt or save for the future. The tool is a customizable calculator that they can use to figure out payment amounts, frequencies and the length of time it will take to meet their goals.

Meanwhile, the “Compare credit cards” and “Find the best account for your needs” videos promote the Credit Card Comparison Tool and the Account Comparison Tool, respectively. These tools allow users to compare features for different credit cards or chequing and savings accounts, including monthly fees, the number and types of transactions, and interest rates. Users can modify the search depending on their personal financial circumstances and the features that matter to them. These tools will dig through all of the information available and provide users with a list of credit cards or bank accounts that meet their selected criteria, allowing them to make a better decision. With the research done, they can focus on choosing the product that’s right for them.

Let’s keep the momentum going!

We invite all partners, stakeholders, and interested parties to join us in working together to promote financial literacy. Whether you (and your organization) share and/or create tools, provide educational programming, or do some form of community outreach, it all adds up. Our efforts make a real, tangible difference to Canadians and their knowledge and confidence in dealing with money matters. We encourage you to keep the conversation going, and to reach out to your communities to promote the many aspects of financial literacy and financial wellness. Together, we can make a difference!

As always, we at FCAC love to hear about your progress and success stories. Contact us on social media (we’re on Facebook, Twitter, YouTube, and LinkedIn), or at info@fcac-acfc.gc.ca if you have something you’d like to share!

You can find (and share) FCAC’s tools online at canada.ca/financial-tools.

Bay Street Bootcamp: The North Meets South Exchange

The Bay Street Bootcamp, run by the Economic Club of Canada, is a program for youth that provides financial literacy training, and an insider’s view into the business world. The program challenges youth to make connections and come up with innovative solutions to real-world problems. And the benefits last beyond the duration of the Bootcamp, as these youth develop new and meaningful relationships with their fellow participants, and every student that is accepted into the program receives an academic scholarship.

What began eight years ago as a week-long program each summer to give youth across Canada hands-on experience with finances has, in the past two years, transformed into a complex two-week cultural exchange program, and has been updated with a new, more fitting title, “Bay Street Bootcamp: The North Meets South Exchange.”

Last year, the two-week exchange took place between Toronto and Nunavut, bringing Indigenous and non-Indigenous youth together on both Indigenous land and in an urban centre. Financial literacy training was embedded into the programming in both locations, and the youth were provided with various issues, and challenged to use their own lived experience and lenses on the world to come up with innovative solutions.

This year, participants of the Exchange, will spend a week at Manitoulin Island, and in Toronto, where they will explore traditional and modern lessons in financial literacy, business, and community. Youth will be provided with a financial literacy framework, and training for their assigned project, and they will use their knowledge to create their own solutions to key issues. The program will culminate with the students presenting their solution – a public policy framework - to decision-makers including business leaders, entrepreneurs, Indigenous elders, and politicians. “What’s exciting for us is to really leverage the senior platform of the Economic Club of Canada, and to provide meaningful opportunities to youth,” said Rhiannon Traill, President and CEO of the Economic Club of Canada.

The North Meets South Exchange program pairs financial literacy with a Truth and Reconciliation approach. “We’ve received tremendous support from both the public and private sector,” said Traill. This includes a partnership with an organization called Canadian Roots Exchange. Canadian Roots Exchange works to teach Canadians about Truth and Reconciliation, and is helping to run this year’s program in Manitoulin Island by helping to organize many of the traditional lessons and teachings in this space.

Students are selected to participate (at no cost to themselves) through an application process. “We’re not necessarily looking for top of class, but a better understanding of these youth and what makes their perspective unique,” Traill said. “We don’t want to have the same people around the table… we want our participants to reflect the reality of the fabric of our country.”

Indeed, the participants are a diverse group: half high school students and half university-aged, half Indigenous and half non-Indigenous. “We love the idea of the cross-mentorship that happens when students that are a bit ahead [university age] come together with younger youths,” said Traill. “This presents our youth, the next generation, with the opportunity to meet and interact with other youth that they never would have come in contact with otherwise.”

This year’s Bay Street Bootcamp: North Meets South Exchange runs from July 2 to July 13. You can follow their progress as they post on Twitter, and Instagram.

A feature length documentary based on last year’s program will be released later this year, along with various curriculum-based resources to bring these lessons to a wider audience. Filmmakers will also be following this year’s group to capture some of the journey of the students. Follow them on social media for updates on the project.

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