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Financial Literacy & Education in Canadian Schools

14K views 58 replies 35 participants last post by  kcowan 
#1 ·
How do you feel about the quality of financial education you received in school growing up?

If you're anything like me, it was non-existent. We spend hours upon hours learning about the water cycle, but no time learning the basics of how to manage money responsibly, or even what interest was.

I did a quick search, and pulled up this.

http://www.fcac-acfc.gc.ca/eng/default.asp

Seems a bit late in the game to be educating people through a website. Chances are, if you're actively searching for financial information, chances are you're not the one most in need of the information. It's those blissfully unaware that most need the help - the only way to reach those ears is while they are a captive audience in schools.

A link to a recent Globe story on the topic:

http://www.theglobeandmail.com/serv...30/BNStory/lifeMain/home?cid=al_gam_mostemail

I believe I heard some media coverage a few weeks back that Harper was planning some inititive in the area of financial literacy. What arenas are you aware of that are advocating change in the approach to Canadian financial literacy and education? Do you feel this should be a Canadian national priority for our governments?
 
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#2 ·
If it wasn't for my parents, I would have learned very little about personal finance while I was younger. I believe they offered 1 business course going through high school which didn't touch on personal finance.

Personally, I would love to get involved with implementing a national financial education program.
 
#3 ·
Hopefully one day there will be an actual personal finance class in high school, and make it mandatory. I think there are quite a few people who move on to college and get enticed by all the credit card offers as it seems like easy money.

I’m one of them, my credit was a mess 10 years ago and I think it made me a much more frugal and credit conscious person today. The “new me” never carries a balance on my credit cards and I have a credit score is now 750+.
 
#5 ·
If they want personal finance classes to work I think the focus should be on role playing scenarios and case studies. Really allow students to relate. It can't just be texts full of information because they already have access to that via the internet.
 
#6 ·
I had no personal finance education whatsoever growing up, in school or at home. My parents were of the belief that discussing finances was a no-no.


My husband is involved in a program called Junior Achievement where he volunteers to teach a 5th grade class for a half day about personal finances, credit cards, and savings.
 
#8 ·
Like others, I picked up frugal financial habits from my parents. I didn't grow up in Canada but I do think that basic personal finance should be taught in schools. I'm skeptical that it would bring about any dramatic outbreak of financial prudence but even if only a small percentage benefit from such education, it would benefit our society at large. The reason for my skepticism is that we all know what is good for us: floss daily, eat vegetables, exercise regularly, save a bit of your income. At least for the vast majority, it is not the "knowing" part that is the problem; it is the "doing" part, IMO. Having said that there is no downside to teaching personal finance in schools and it is worth trying.
 
#10 ·
At least for the vast majority, it is not the "knowing" part that is the problem; it is the "doing" part, IMO.
I wonder whether the knowledge really is as commonplace as enthusiasts such as ourselves would like to think. From inside this personal finance bubble, it is a little hard to imagine NOT having the understanding, but when I rewind my own experiences a few years, it wasn't until I took an Engineering Economics course in final year and first saw the concept of time value of money that things really clicked. That was the spark for the fire, for me. I would wager that a lot of people never get that spark. You could also wonder how we might be failing to provide some of the fuel for that fire as well, such as basic math skills around percentages/fractions/exponents.

I would love to be able to send a survey to the Canadian masses asking a range of fairly basic questions from the personal finance arena, and analyze the responses. I think there are some real holes in the basic financial literacy of our citizens.

Is anyone aware of any data/studies that have been conducted on assessing financial literacy levels in Canada? Are there groups doing research in this area?

And I'm interested in Alexandra's reference to the Junior Achievement program. I've dug up the Canadian site for this program, and it looks like there are a wide range of possibilities for how you/we can perhaps make a difference in the education of our youth. It appears there may be an opportunity to get involved in some in-class outreach, if you have the inclination and the time.

http://www.jacan.org/programs.cfm
 
#9 ·
My financial education when I was growing up consisted of my father showing me his empty wallet and saying "This is how much money you can spend, because this is all there is"

I took a great interest in my financial education so I would never be like my parents.
 
#13 · (Edited)
Junior Achievement

Here's another link for those of you in Central Ontario:

http://www.jacentralontario.org/

Here's the details on the experience from my husband:

Basically, you apply online and they contact you. My husband had to do a one-hour training course at Junior Achievement. They gave him the course material, and also an outline as to how to run the class, but my husband added his own point-of view and his own sense of fun. For instance, he bought Nerf footballs, and when the kids wanted to answer a question, he chucked the football at them. They caught it, answered the question, and then tossed it back. He bought prizes for them, and had little made-up pop quizzes so he could give them out. The kids and the teacher had a great time...the class can be as fun as you make it. the class was actually a full-day, not a half-day as I first thought.

JA are looking for people who can talk in front of others, and for people who have some career or life experience to talk on the subject of finances. And, as my husband put it, they are looking to weed out "creepy people" so that is why they will meet with you in person for the training course.

They assigned him a school and class - you will have no choice in that regard (i.e.: you will not be able to teach your 11-year old son's class). According to the website, they are desperately looking for more course instructors, so for those of you who want to give back to the community, here's your chance!

One caveat: Two times, my husband came down with the flu after teaching the course. As he puts it, those classes are petri dishes for germs ;-). So make sure you wash your hands frequently and get your flu shot!
 
#14 ·
Basically nothing in school. There was one business course and one economics course in high school. Neither touched on personal finances. I wish there were courses available back then to take rather than having to take some of the ridiculous mandatory courses which were useless. If I knew then what I know now I would have taken better care of my finances through my 20s and would have had more freedom to do what I wanted now. Ah well.

The only thing I learned from my parents is what NOT to do.
 
#26 ·
It's still pretty much the same - there are a couple of classes now called "Math in the Workplace" but these are geared toward students heading to the workplace, not college or university. There is nothing in place for those that will hopefully have a really good income someday.

My childhood experience with $ was watching my dad count out his weekly pay package into my mother's hand every Friday. Then she would hand him back $20 for his personal spending. Neither of them finished highschool but they were really good with money.

My first job was with the Royal Bank for 14 years and that's where I gained my money knowledge. They offered a lot of free courses on accounting and such and paid a bonus of $100 when I completed them (which was why I really took them) but they really did help a lot.
 
#17 ·
I remember in high school, those students in the "basic" stream learned to fill out tax forms in math class, while those in the "advanced" stream did not. (Those terms are no longer used.) I guess it was on the premise that those in the advanced stream could figure out how to do their own taxes. But I doubt very much those in advanced could, especially those that did not pursue math past grade 10 and could not add two numbers together without a calculator.
 
#49 ·
My experience was similar - though with more time, I remember some of the advanced math classes teaching formulas to calculate financial items like how much to invest now at a set interest rate/payment schedule to end up with a future value. However, it was out of context so it didn't really mean a lot in the big picture.
 
#18 ·
Investor Education is a good site as well. I like it because it is unbiased. They are not trying to push any products on you.

"The Investor Education Fund was established by the Ontario Securities Commission, the province's securities regulator, and is funded by OSC enforcement settlements. It operates separately from the OSC with its own Board of Directors."

http://investored.ca
 
#21 ·
I checked out the Junior Achievement site for Ontario and was surprised to find that one of the courses they offered was a five week stock picking competition. This is evidence that we REALLY need to increase the financial literacy in Canada - if the volunteer educators who are trying to do the right thing are using the wrong tools and potentially only presenting one side of the investing world - this is not as helpful as it is certainly intended to be.

Perhaps that is more reason to get involved, because it is a great initiative.
 
#24 ·
I agree. Stock picking should be one of the lowest priorities. Unfortunately, it is one of the only "sexy" topics in personal finance. It is hard enough to keep students' interest on these topics as is.

I remember doing a mock version of the Toronto Star stock picking challenge once or twice when I was in high school. I learned a few things from the exercise despite the short time frame. In particular...
- In a short time frame, a portfolio chosen at random was not much worse than one chosen by the so-called experts.
- Never pick a stock because it is all over the news (like Bre-X).
- If it's cheap, there's usually a good reason.
 
#25 ·
Financial Literacy is one of my new "hobbies".

The Financial Consumer Agency of Canada has some great info on Financial Literacy, including survey results.
http://www.fcac-acfc.gc.ca/eng/default.asp

There have been two conferences in Canada, and the report from the second one is just released March 2009.

I teach university coroporate finance and I use many personal finance issues to discuss the time value of money etc. Our university also offers personal finance courses.
I have made a proposal to the Dean of our faculty to take a "Financial Literacy" course to the public - and we will hope to in the coming school year.
Also, I have contacted our prov and fed reps to ask what each govt is doing to improve financial literacy in our communities.
It's great to teach it in school so we can improve the generations ahead, but I also feel we need to get to the parents. Those most "hurt" by poor financial decisions need solutions and options put before them that will work in their home and community.
As I am able to move forward on this I will post updates.
 
#27 ·
I've commented on financial literacy a few times on my blog, such as here:

http://network.nationalpost.com/np/.../10/financial-literacy-christmas-edition.aspx

Generally, when we baby boomers went to high school, there was no personal finance instruction whatsoever. That's changed now. My daughter last year took a Math for Personal Finance course from the Ottawa Carleton Internet School and I was surprized how useful it is. Mind you, it's got a fair bit of math, as it relates to interest rates, mortgage amortizations, annuities etc.

I'd argue such a text should be twinned with something less daunting, ideally a "story" like David Chilton's The Wealthy Barber or indeed with my own financial novel, Findependence Day. See www.financialpost.com/fd. Either book or others like them can get them interested in the topic in a non-threatening manner, then if they get "hooked" they can go to the textbooks for the detail.

And of course, this excellent new financial forum will also be helping the cause of financial literacy in Canada, as does www.investored.ca

Congratulations to the people who launched CMF (my abbreviate term for Canadian Money Forum.) It's rapidly becoming the premier financial discussion forum in Canada!
 
#29 · (Edited)
Looking back at high school I believe I learned how to cut some material from a pattern and use a sewing machine to make a pair of shorts for myself. Interestingly enough I have not made any of my own clothing since. :)

I would think that some place in Home Ec, Lifeskills or Algebra certain financial principles would be covered.

About a month ago I pulled the 14 year old boy from the PS3 for long enough to show the results of abusing a credit card, making extra mortgage payments and the power of compound interest. Let's just say it held his attention and he has committed to start investing 20% of his summer employment income.

Wishing I knew as much at 14 as I knew now!
 
#30 ·
#32 · (Edited)
I think this has already been touched on here, but I love the idea of financial education in schools, but on the other hand, I am leery about teachers who know little of the subject, teaching my kids about it. Not to mention, a course designed by government. Will there be a chapter in there called "If you don't have enough money, just print more and spend it anyway" ??
 
#33 ·
I think this has already been touched on here, but I love the idea of financial education in schools, but on the other hand, I am leery about teachers who know little of the subject, teaching my kids about it.
Really, is that any different than any other class in high school? More than likely, the teacher will follow whatever material is handed to them. Maybe something as simple as having the Wealthy Barber as reading material would be a place to start.

Anyway, it's a good idea, though I would have thought something like this would be easily covered in home economics or classes of that sort.

Not to mention, a course designed by government. Will there be a chapter in there called "If you don't have enough money, just print more and spend it anyway" ??
I believe that's an advanced economics course, I'm sure certain people in the government have taken it. ;)
 
#34 ·
Concerning the complaint about the poor state of financial/personal financial training that our kids get in the system..... and the statistic that only 11% OF ALL WORKING CANADIANS HAVE A WRITTEN FINANCIAL PLAN.

Here is my anecdote.... (BTW, I author personal financial planning software, so this is near and dear to my heart)

I was born in 1941. My mother was born in 1917 in Vancouver, and was a product of our education system circa 1930 or so.

Many years ago, she showed me one of her old HIGH SCHOOL HOME ECONOMICS textbooks which was concerned with personal financial planning.... it had three detailed numeric tables...

-present value tables
-sinking fund tables
-mortgage/ annuity tables

She walked me through various exercises... one of them was as follows:

"You have $X already saved in your retirement fund, you are currently saving $Y per year and will continue saving $Y until you retire, and finally... when you retire, how much income can you look forward to in retirement?"

She showed me the methodology (using those three tables) and how you would determine an optimum amount to save in order to achieve a particular retirement income level.... tweaking the planned retirement age, interest rate assumption and retirement goal.

You could work backwards... determining how much you would need to save annually in order to reach a desired retirement income level. There were a variety of methodologies.

It was tricky, but eminently do-able.

Here is the punch line.... this was in a 1930 high school home ec class... attended by girls!!!

Oh, and by the way.... in 1930 there were no computers, let alone computers in classrooms.

Can you imagine giving the above exercise to a current high school graduate?

I like to relay this anecdote whenever I get frustrated with the current lack of basic financial planning skills in the population.

I sure wish I had held on to my Mother's old Home Ec text.
 
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