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What does financial literacy mean, and why does it matter?

With the holiday season approaching, it’s a good time for many people to refresh themselves on their finances and how they can manage their money better.
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November is Financial Literacy Month in Canada. With the holiday season approaching, it’s a good time for many people to refresh themselves on their finances and how they can manage their money better. Plus, this means yet another year is coming to a close. With that in mind, the timing is perfect to start thinking about your future plans for your money. Here’s what you need to know about financial literacy!

What is financial literacy?

Financial literacy refers to how well a person understands their finances in a way that lets them make the right decisions about their money. A financially literate person has the skills and knowledge to comprehend financial terms, and make money choices that will benefit them. Important topics to understand include budgeting, debt management, financial planning, and investing. 

Financial Literacy Month brings resources to Canadians through the Financial Consumer Agency of Canada (FCAC), which collaborates with other organizations in the financial sector. Canadians can access resources and information such as statistics, articles, webinars, events, and more. Most of us aren’t experts on financial literacy, so this is a good time to understand how to manage your money and prepare for the future. 

Why does it matter to you?

Why do you need strong financial literacy? As long as you’re making your rent or mortgage payments on time, what else do you really need to know? The more you understand about your finances, the more opportunities it opens up for you. Financial literacy can allow you to create the right budget for your lifestyle, or understand what interest rates you might be eligible for with a mortgage. You might learn how to handle your debt, how to start investing, or anything else that can improve your financial well-being. The higher your understanding, the more involved you can be in the financial world and apply your knowledge to your own situation. 

Where to begin

It can be hard to know where to start if you want to learn more about financial literacy. How are you supposed to know what you don’t know? Think about your goals. Do you want to buy a home? Are you hoping to start investing? Do you need to pay off debt? This will influence the kind of materials you may need, and the questions you should ask a professional. You can find great resources from the Government of Canada’s Financial Literacy Database to narrow down your search and find what you’re looking for.

You can also meet with a mortgage professional like a broker if homeownership is one of your goals! Brokers can help you understand the costs of buying a home, what today’s interest rates look like, and what lenders you can connect with. When you’re preparing for your first meeting with a broker, you can ask yourself the following questions:

  • What’s my current income?
  • How much can I save each month?
  • What are my biggest financial goals?
  • What’s a realistic budget for buying a home?
  • What do I need to do to make homeownership achievable?

Taking part in Financial Literacy Month can impact how well you understand the market and your finances when you approach homeownership. If you need help getting started, you can get in touch with Clinton Wilkins Mortgage Team! You can call them at (902) 482-2770 or contact them here.

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