November is Financial Literacy Month in Canada, and we can’t tell you how excited we are about it!
But before we get the party started, there’s an important question we need to answer: What exactly is financial literacy?
We think of financial literacy as the ability to make a budget, manage daily finances, save for the future, and prepare for a financial emergency. In other words, it’s about being able to ensure that you have money when you need it.
Why is financial literacy important?
When you know how to manage your money, you’re in a better position to pay not only for the things you need (like your home and cell phone service) but also for the things you want (like a relaxing beach vacation during a cold Canadian winter).
In comparison, when you don’t know how to manage your money, you’re more likely to end up with debt that limits your lifestyle, places a burden on your family, and keeps you up night after night.
So let’s kick off Financial Literacy Month with 4 timeless money tips that you can put to work this month.
Drop the things you can't afford
No, that’s not a typo. It can be as simple as sacrificing a few dinners out or finally canceling a few subscriptions that you never use. You may need to take a few extra steps to truly live below your means, but these simple changes are a great place to start.
Create a budget
Hate numbers? The good news is that budgeting is much more like a third-grade math problem than a high school calculus question. After all, it’s essentially like asking that if you make $2,000/month after taxes, how can you pay for housing, food, debt repayment, and entertainment without running out of money?
Trust us, making a budget isn’t as hard as it looks. And it’s a great way to understand your own money patterns, which is the first step to becoming financially literate.
Avoid credit card debt (or better yet, start paying it down)
There’s no denying that credit card debt is crippling. When your credit card debt is so high that it doesn’t feel like the minimum payments pay anything down, taking steps to get relief from your credit card debt will ease your money worries.
Spend time reading about the topics you’ve been avoiding
Hey Canadians - It’s cold outside, it gets dark earlier and earlier, and you’re getting ready to settle into winter hibernation mode. So it’s the perfect time to find some blogs, books, or articles about those financial topics you’ve been avoiding – RRSPs, TFSAs, ETFs, or even life insurance!