Financial Literacy Newsletter - November 2020

Financial Literacy Newsletter: Marking 10 years of Financial Literacy Month

A few words from FCAC

Welcome to a special edition of the newsletter as we mark the 10th Anniversary of Financial Literacy Month (FLM)! Whether this is your first Financial Literacy Month, or you’ve participated in all of them to date, we’re glad to have you with us as we celebrate this milestone. 

Without a doubt, 2020 has been a year filled with challenges, and many of them can be linked back to the COVID-19 pandemic. Research shows financial stress, impacts on physical and mental health, job insecurity, and physical distancing have made it harder for Canadians to pay their bills on time, manage their debts and save for unexpected expenses. This just gives more importance to what we do. This FLM, it becomes timely to equip Canadians with the tools they need to regain financial confidence.

Financial literacy has never been more important and strengthening this skill is a life-long endeavour. We would like to acknowledge the 10 years of collaboration among the many financial literacy advocates and practitioners across this country, working to elevate financial literacy in Canada. 

Perhaps one of FCAC’s most relevant research findings is that by doing small things today, people can significantly change their circumstances over the long term - and this is true irrespective of income level. This is why, as part of our 10th anniversary celebrations, we want to focus our discussions on “10 things you should know during times of financial uncertainty.” Whether its committing to a spending plan, building good financial habits, or paying down your debit, these ten things will support you as you navigate your financial journey through these challenging times.  You can find the 10 things you should know infographic, and more details about FLM at Canada.ca/FinancialLiteracyMonth.

Though this year’s FLM campaign is a bit different, there are still many ways to get involved.  Whether attending a virtual event or joining the conversation on social media, there is something for everyone.

As always, we invite you to browse through FCAC’s tools and resources, check out the amazing content on our COVID-19: Managing financial health in challenging times webpage,  as well as to try out the new, interactive wizard for the Canadian Financial Literacy Database. 

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, Twitter, and Instagram accounts – we’re also on YouTube and LinkedIn.

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What’s new

• FCAC will be launching the 2021 Building Better Financial Futures Challenge in January 2021. This research challenge will be open to post-secondary students (undergraduate and graduate) registered at a Canadian post-secondary institution. Stay tuned for more information. Email Competition@fcac-acfc.gc.ca to learn more. 
• FCAC has updated their Covid-19: Managing financial health in challenging times webpage with new content on the impact of payment deferrals on credit reports and score; information on the risks associated with the increase use of debit card transactions instead of cash; and information on how Canadians can get financial assistance now that the Canada Emergency Response Benefit (CERB) and the Canada Emergency Student Benefit (CESB) have ended.
• FCAC has published new information about mortgage deferrals and what consumers should know about the deferral period ending.
• Canadian Mortgage and Housing Corporation has some helpful new resources available:
  • COVID-19: Understanding Mortgage Payment Deferral 
  • Dealing with Mortgage Payment Difficulties 
  • I Can’t Pay my Mortgage, What are my Options? 
  • 10 Words to Know When Buying a Home

Mark your calendar – FLM 2020 events:

• November 10th - 10 important things you should know about managing your money and your debt. Join FCAC for this interactive webinar to learn more about managing your finances. This event is open to all Canadians. (Register here for the event)
• November 19th - It’s your money – Make it count! An event targeting students and recent graduates interested in learning more about managing their money. Brought to you by FCAC and the Canadian Bankers Association, the content will also be valuable for parents, teachers and anyone working with youth. (Register here for the event)

Marking 10 years of FLM

Financial Literacy Month (FLM) is the time of year when we mobilize and collaborate to promote and raise awareness of the importance of financial literacy. We’ve covered a lot of ground since the first FLM launched in 2011, and we should all be proud of what we’ve accomplished. It’s been an incredibly productive decade, and we’ve laid the foundation for more great achievements in the years to come. 

The image below includes a few of the many highlights from the past ten years.  We hope that these highlights help you think fondly of some of your own FLM memories and inspire you to continue to engage with us on this important journey to strengthen the financial literacy of all Canadians.

Figure 1: A series of tiles showing some of the notable moments of the past 10 years of Financial literacy Month (FLM)

Sneak peek: financial literacy research in Canada

Later this month, FCAC will publish “The Review of Financial Literacy Research in Canada: Environmental Scan and Gap Analysis". The review describes some current and planned financial literacy research projects and identifies existing gaps. It is intended as a map to help guide the work of the national financial literacy community.

The environmental scan is organized by four research priorities (Managing Debt, Navigating the Marketplace, Saving, and Budgeting) and four themes (Mental & Behavioural Abilities, Social Determinants of Financial Well-Being, Financial Technology, and Research in Practice) which were identified in collaboration with FCAC’s Research Committee.

Figure 2: Consumer Financial Well-Being is supported by the interaction of four research priorities and themes.

This review is contributing to the newly developed FCAC Integrated Research Plan—the main goal of which is to provide even stronger support for evidence-based and behaviourally-informed policy development, programs, and interventions which will ultimately contribute to FCAC’s role as a leader and innovator in financial consumer protection.

Share your views on the renewal of the National Strategy for Financial Literacy!

During FLM 2020, the Financial Consumer Agency of Canada will be launching an interactive website to invite public and stakeholder discussion on the renewal of the National Strategy for Financial Literacy — Count me in, Canada. The Agency is updating the strategy to make sure it reflects the evolving needs of Canadians and our changing world, which includes the impact of COVID-19 and ongoing economic uncertainty.

We want feedback on how all Canadians can strengthen their financial literacy. Your input will help ensure the renewed strategy is inclusive, relevant and accessible for all Canadians.

We have also developed a consultation paper to both present ideas and gather feedback. It includes questions for feedback, as well as background documents for more context.

Join the conversation! Share your comments with us until January 29, 2021.

The renewed strategy is scheduled to be launched in the spring of 2021.

The financial impact of COVID-19 on working Canadians

Research shows that working Canadians, in particular those living on a low-income, with lower levels of education and lone parents, are most affected by the impacts of COVID-19.  The financial impacts of the pandemic on Canadian workers and their families highlights the need for strengthened financial literacy.  It is more important than ever to understand your finances, to make informed decisions about financial products and services, and to invest in your financial well-being.

FCAC’s research on financial well-being in Canada found that people who have the strongest financial well-being do these two things: 1) They make an effort to save and 2) They avoid borrowing for daily expenses.   These two key behaviours alone can help improve an individual’s financial well-being score and improve their financial resiliency during challenging times.

FCAC developed the Financial Wellness in the Workplace web resource to help employers and employees leverage the benefits of financial wellness programs.  Here are some other resources available to help working Canadians improve their financial well-being:

• The University of McGill offers a FREE Personal Finance course online.  Taught by professors from McGill University's Desautels Faculty of Management, the course is open to everyone, with a certificate upon completion. There are sessions cohorts beginning throughout the year.
• Empower U Building Confident Futures is a two-pronged program of financial literacy education and a 1:2 matched savings plan. While the primary focus of the program is on women, it is open to all people of diverse backgrounds who are experiencing low income and poverty.
• CPA Canada offers eight adult sessions targeting the diverse financial literacy needs of Canadians. Whether they are starting out in their career, raising children or planning to retire, there is something for everyone.
• Credit Counselling Society’s Money Smart Living workplace financial wellness program is designed to help employees manage their finances through education and access to confidential financial coaching with an Accredited Financial Counsellor.

You can find more resources in the Canadian Financial Literacy Database.

Managing your personal cash flow during the pandemic

By: Ontario Securities Commission  

Cash flow is an important indicator of your financial health. It is the money you have coming in and going out at a given time. For example, you have a cash inflow when receiving a paycheque and a cash outflow when paying a bill. An overall positive cashflow means you can pay your current living expenses and financial obligations on time as well as have money left over for savings or future expenses.

The COVID-19 pandemic has brought many financial challenges for Canadians including reduced income, job loss, lower returns from investments, and higher food and housing costs. You may have experienced irregular cash inflows or needing to borrow money to make ends meet.

Cash Flow Calculator

Use this calculator to estimate your monthly cash flow.

5 reasons to use the Cash Flow Calculator

1. Find out where your money goes

Are you a responsible spender? A savvy saver? It may be difficult to know without accurately tracking your money habits. You may also find “budget leaks”, like a subscription or membership that you no longer use but are still paying for.

2. Understand your minimum cash needs

Ensure you have sufficient funds to pay bills when needed. A missed credit card or mortgage payment could result in penalties or interest charges as well as have negative impact on your credit score.

3. Plan for different scenarios

Financial uncertainty can be stressful. Explore how different scenarios could impact your overall financial health, such as a lower-than-expected paycheque or higher food costs.

4. Use emergency funds carefully

It may be necessary to access your emergency funds until your financial situation improves. The funds should be used for essential needs and may have to last several months.

5. Save or invest for the future

Find opportunities to set money aside for an emergency fund or investing for a future goal. Remember, even small amounts add up over time.

Why talking about money with children pays off

The financial literacy results from the 2018 Programme for International Student Assessment (PISA) survey conducted by the Organisation for Economic Co-operation and Development (OECD), showed that Canada ranked second, tied with Finland, out of 20 participating countries and economies for the second time in a row. To help keep the momentum going, the Financial Consumer Agency of Canada (FCAC) is encouraging parents to talk to their children about money and finances during these challenging times. 

As many families are re-evaluating their household finances as a result of the COVID-19 pandemic, parents may wish to  consider involving their children in conversations about how the family is responding financially and how they are reassessing their spending in light of the situation. This can be a good way to open the door to discussing important personal finance topics, such budgeting, having savings in case of an emergency and protecting yourself from financial fraud. 

Emergency savings is a topic hitting close to home in 2020, with youth (15 to 24 year-olds) experiencing unemployment rates that almost tripled between February (10.3%) and May (29.4%). In fact, 29.4% is the highest monthly rate ever observed – even higher than during the last three recessions in the early 1980s, early 1990s, and late 2000s. These statistics speak to the significant challenges that face young people in Canada. By arming them with a good understanding of their own finances and of healthy financial behaviours, we are helping them to build confidence, teaching them to keep track of their money and to plan ahead with their spending, and in doing so, setting them up to succeed.

FCAC has tools that make it easier to talk to children about money. Encouraging discussions between parents and children is an important element of FCAC’s financial literacy efforts. The webpage “Teaching children about money” offers free, unbiased resources and tools to get you started. Here are some other useful resources to help teach youth how to manage their money:

• Money Sense: Financial Literacy in the Classroom is a program offered by Saskatoon Industry-Education Council (SIEC) that is designed to help middle years teachers as they teach their classes Saskatchewan’s new financial literacy curriculum.
• L’Autorité des marchés financiers’ Tes affaires! provides youth with educational tools and useful resources to learn how to manage their finances at school and at home.   It also offers complimentary teaching activities for Quebec’s Secondary School Education Program. 
• Junior Achievement Canada has a number of tools and games for students designed to help build an understanding of how financial decisions can impact your life and business. JA Digital Campus was recently launched in Saskatchewan with Innovation Credit Union to offer online programming for students in grades 3 through 10. 
• PennyDrops, a student-run non-profit, has launched a new online platform called Pennydrops Anywhere where students can learn to be financially literate, from anywhere, and at any time, with the help of PennyDrops mentors.

You can find more resources for youth in the Canadian Financial Literacy Database.