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Manitobans Have More to Learn About Financial Literacy

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This article was published 07/12/2021 (1753 days ago), so information in it may no longer be current.

Do you know the difference between an RRSP and a TFSA? What about how much life insurance you need based on your age and stage of life?  

Chances are if asked these questions, you may get the correct answer, but if you’re like most Canadians, you wouldn’t be confident when making your pick.  

That’s exactly what a new survey from Canada Life recently discovered.  

To kick off financial literacy month, the 174-year-old insurance company set out to test Canadians’ knowledge of general financial topics like saving, debt, investing and insurance. Before taking the 10-question quiz, each respondent rated their confidence in their financial knowledge. Despite only two out of five Canadians (41 per cent) claiming high confidence, the average grade on the quiz was 71 per cent. 

Out of all Canadians surveyed, Manitobans were the least confident.

“The survey shows a gap between confidence and actual understanding,” said Hugh Moncrieff, Executive Vice-President, Advisory Network and Industry Affairs, Canada Life. “When Canadians have a better understanding of their finances and general financial concepts, they can become more confident, and ultimately make better decisions about their money. Seeking out expert advice is the best remedy to help you bridge the gap between knowledge and confidence.” 

That means increasing one’s financial literacy – but that means so much more that just knowing the answers to the questions on a quiz, Moncrieff advises.

“Being financially literate means putting that knowledge to good use, so you can make responsible financial decisions,” he said. “It means you can create a budget and manage your chequing account. It means you understand how credit card interest works and how to use them without racking up debt. And most importantly, it means understanding what is involved in planning for your future financial needs – like paying off student loans, buying a house, starting a family or even retiring.”  

On top of the lack of confidence uncovered by the quiz, Moncrieff says the pandemic has also taken a toll on Canadians in many ways – especially financially. 

“The COVID-19 pandemic has caused an increase in loss-aversion, so it’s natural for investors to want a sense of predictability, confidence and control over their investments. As we continue to navigate an increasingly complex economy and set our sights on life in a post-pandemic world, it’s important that Canadians arm themselves with expert advice in order to get on the road to recovery.” 

The good news is, he said, Canadians don’t have to do it alone. A financial advisor is key to boosting financial confidence, regardless of market conditions.   

“We all have our own unique needs, which is exactly why a financial advisor is so helpful every step of the way. Their guidance and expertise can help ensure you’re making the right choices and building the financial confidence you need to set you on the right financial path.” 

Another interesting finding from the quiz was that Canadians aged 21 to 29 had the lowest average scores (56 per cent) among all age groups. However, the survey also found that these younger Canadians are more interested (56 per cent) in learning about the topic over the next six months than any other age group. 

“It’s encouraging to see that young people want to expand their financial knowledge,” said Moncrieff. “We know the best time to start educating youth about money is at an early age – but, learning shouldn’t stop there. No matter who you are or where you live, we all need to know how to effectively manage our own money. So, whether you’re 17 and starting your first job, or 65 and looking forward to retirement, your first step towards financial success is to have a plan.”

To connect with an advisor and see how Canada Life can help you plan for life as you know it, visit canadalife.com/find-an-advisor.

The Canada Life Financial Knowledge survey was conducted by Canada Life from October 6 – 13, 2021, with an online sample of n=1,507 Canadian adults who are members of the Angus Reid Forum. The margin of error for a probability sample size of 1,507 is ± 2.5% 19 times out of 20.