Back to school in Ontario: The economics of life
With the new academic year barely underway, Ontario schooling is in the news more than usual right now as education workers begin a work-to-rule campaign.
This stops in its tracks the annual routine of Ontario residents scrutinizing our children’s curriculum: the province’s ban of cellphones in the classroom, the ballooning size of classrooms and qualifying math tests for teachers.
As we debate the way we run education and shape the brains of tomorrow, one discussion that caught my eye is the ongoing movement surrounding financial literacy. A recent survey by the Canadian Payroll Association found nearly 8in-10 Ontario workers want financial education in the workplace. Meanwhile, more and more young people are raising their voices, calling for greater skills and knowledge around money. For example, 18-year-old student, Anjana Somasundaram argues basic money management should be part of every student’s education.
There is a lot of value in Anjana’s case. Refining financial literacy in the classroom will teach students the fundamental components of budgeting, bank accounts and setting financial goals. While children are already in the learning environment, it makes sense to embed core skills that will benefit them for the rest of their life.
When I was working with one of the big six Canadian banks, we realized that we needed to support our clients’ children by creating discussions on money and the responsibilities that came with it. Bringing in outside perspective with experts helped guide young adults in the areas of budgeting, credit scores, cash flow and investing. It also helped all the adults in the room gain some perspective.
The trope goes something like this — learning is a lifelong pursuit. Well it should be, because whether young or old, there are lessons to be learned. As Benjamin Franklin once said, “an investment in knowledge pays the best interest.”
And the truth is, knowledge (and age) are not the only factors in understanding money. Equifax reported that delinquency rates for seniors have risen for five straight quarters. When will the life lessons ever end? And where do Canadians even begin to look for answers?
One of the challenges I’ve heard when speaking to people regarding financial advice is, “how do I know I’m not seeking advice from the next Bernie Madoff?”
Some research conducted by Advisorsavvy showed that 37 per cent of Ontarians do not use a financial adviser (a solid way to learn about money), while almost six-in-10 Ontarians (57 per cent) would not even know where to look for an adviser. So, financial literacy isn’t just a problem for young people — It plagues all ages of the population.
Another challenge is that only one-in-10 Ontario residents have “no fears at all” when choosing a financial adviser. Or perhaps better said, 90 per cent have fears — the top five of which are selfishness, fraud, fees, lack of credentials and lack of experience.
The numbers show that three quarters of 18-34-year-olds do not use a financial adviser, significantly higher than the national average; but the truth is, younger people have much more to gain by staying focused on their financial goals.
As young people like Anjana Somasundaram clamour for knowledge, it is our responsibility to provide her and her cohorts with the tools to do so. Financial institutions, policy-makers, educators, community leaders and financial planners can all play a part in the due diligence required to educate Canadians young and old.
Solomon Amos is founder of Advisorsavvy a community that helps consumers find, compare and rate local investment, financial and insurance professionals in good standing through a collective knowledge base of online feedback and reviews.