Financial literacy matters; helping students to learn about the power of money

BY PAUL JUNOR

Financial literacy has become very important to the younger generation in all grades, levels and areas of school. The role that money plays in their lives has become a priority as issues around money management and fiscal responsibility has become significant in their social, economic and financial world. According to Investopedia it is explained as, “The education of various financial areas including topics related to managing personal finance, money and investing.” According to Wikipedia, “It is the possession of skills and knowledge that allows an individual to make informed and effective decisions with all financial resources.” Financial literacy is thus a basic life skill that is integral to one’s economic life and enables the individual to plan, organize, budget, coordinate and control one’s future and destiny.

The ministry of education has recognized the importance of financial literacy in student’s lives and has taken steps to ensure that the students acquire fundamental knowledge and skills with respect to the wise and mature use of money. The government has seen fit to emphasize the teaching of financial concepts to elementary school students across the curriculum in subjects such as: social studies, history, geography, Canadian and world studies programs as well as mathematics. According to a ministry of education document “Students also examine practical financial matters in order to develop their ability to make informed economic choices in their day-to-day-lives. This will no doubt contribute to the development of strategies for managing money.

In the ministry’s document titled “A Sound Investment: Financial Literacy Education in Ontario Schools, 2010” the vision of financial literacy is clearly stated, “Ontario students will have the skills and knowledge to take responsibility for managing their personal and financial well–being, with confidence, competence, and a compassionate awareness of the world around them.” This all-encompassing vision is crucial and critical to the development of life skills and values. In addition, it has a vital role to play in preparing young people to take their place as informed, engaged and knowledgeable citizens in the global economics. Furthermore, the document reinforces that “This education can provide the preparation Ontario students need to make informed decisions and choices in a complex and fast-changing financial world.” In this regard, Ontario’s students need to learn a wide range of topics that include but are not limited to the specifics of saving, spending, borrowing and investing especially in the early grades.

In addition to learning basic financial terms, students are expected to develop skills in the areas of problem solving, inquiry, decision-making, critical thinking and critical literacy related to financial choices. Furthermore according to the document, “Being responsible citizens in the global economy, they will need to understand the social, environmental and ethical implications of their own choices as consumers.”

In high school all the grade 11 math courses have a financial unit in which students are taught about: managing money, simple and compound interest, credit, annuity and investments. According to www.creditcanada.com, “Anything you acquire for future income or benefit. Investments increase by generating income (interest or dividends) or by growing (appreciating) in value. Income earned from your investments and any appreciation in the value of the your investments increase your wealth.” Students learn that when interest is paid on previously earned interest as well as original deposit or investment, money can grow much faster. The opposite side is compound interest you are charged if you make purchases on a credit card. Students should be aware of impulse buying and having a good credit score.

In Canada, November has been designated Financial Literacy Month to encourage Canadians to take control of their financial well-being and invest into their financial future by leaning about topics of personal finance. Canada has also established a government entity to “Promote financial education and raises consumer’s awareness of their rights and responsibilities, known as the Financial Consumer Agency of Canada (FCAC). Further Information is available at www.Canada.ca/enfinancial