Many Canadians are faced with countless financial decisions every day. We earn income, pay bills, buy necessities, build savings and deal with the many “curve balls” life throws our way. While these day-to-day decisions may seem routine to some, historically, Canadian women have been found to have a lower level of overall understanding and confidence when it comes to managing finances, or what is called financial literacy (Statistics Canada, 2014, 2019).
The good news, times are changing. More and more women are taking control of their financial situations, becoming household breadwinners, independent business owners, and equal financial contributors. It is more critical than ever for women to start investing time in improving their financial literacy.
Here are the facts:
Canadians are choosing to be single longer. In 2021, the percentage of single-person households in Canada reached an all-time high at 29.3% (Statistics Canada, 2022).
Family life in Canada is becoming increasingly diverse. The number of single-parent families continues to increase in Canada, and while the number of single fathers has increased, single mothers accounted for 81% of single parent families in Canada (Statistics Canada, 2014).
More and more Canadian women are pursuing post-secondary education. In 2016, 40.7% of young women aged 25-34 reported having a bachelor’s degree or higher, up from 32.8% in 2006. In addition, 86.5% of young women, aged 15-24 chose a bachelor’s degree or above as their highest desired level of education (Statistics Canada, 2016).
Canadian women are participating in the workforce more than ever before. Of women aged 20-54 who were not attending school full time, 68% were employed full time in 2021, up from 65% in 2007 and 55% in 1997 (Statistics Canada, 2022).
The amount of Canadian women who are becoming self-employed is increasing. The number of self-employed women increased by 110% between 1987 and 2018. Canadian women’s share of the self-employment market increased in several highly specialized industries such as professional, scientific, financial and technical services (Statistics Canada, 2019).
So, what does this have to do with women and financial literacy? These statistics show that more Canadian women are managing households, whether they are alone or supporting a family. This means that living expenses, investments, savings, and debt payments in many households are not only the responsibility of women but an increasingly important priority when planning for life and its unexpected events. On top of that, the increase in women pursuing post-secondary education means that more women are now holding student loans and higher amounts of personal debt. The importance of a strong understanding of financial management has never been greater for Canadian women. The next question is, how do we deal with it?
Here are a few tips for becoming more financially literate:
Tip 1: Self-education is self-care
If you’re concerned about your financial future, you’re certainly not alone. As with many things, a good place to start is with research and self-education. Begin your financial education online by exploring resources from government organizations like the Financial Consumer Agency of Canada and Service Canada, your provincial Financial Services Agency (e.g., Money Smart Manitoba) or other financial literacy organizations.
Once you have some foundational information, move on to the websites and online resources provided by financial institutions such as banks, investment companies, professional finance designations (e.g., CPA Canada) and financial advisors. When reviewing the information on these sites, it’s important to look at more than just the institutions that you currently use. Look at all available banks and investment companies to compare information, rates, policies and reviews.
If you are looking for a specific answer and can’t seem to find it on these sites, you can Google your question. Just remember to look for your answer on qualified sites either from a professional or a financial organization. Check for certifications: are they a CPA, LIT, or financial counsellor? Do they belong to legitimate organizations? When it comes to Google search queries, it is important to look at multiple search results to fact check your answers.
Tip 2: When in doubt, talk it out
If you have questions about your finances, it’s important to seek answers. Talk to your partner, a financially savvy family member, a trusted friend, or a financial advisor about your concerns, thoughts, and financial goals. Finding someone with whom you can have an ongoing, open dialogue about finances is important. If you’re in a relationship, it’s important to discuss each other’s financial situation and goals, both as individuals and as a couple. For more advice on how to have the ‘money talk’ with your partner, check out our blog.
If you are in a single-person household, try talking to a parent, a sibling or a friend about your financial situation. Having a trusted person you can discuss your finances with helps relieve some of the stress and confusion that can arise when dealing with one’s personal finances.
Many banks provide financial advisors to their clients, some investment companies offer free consultations, and local organizations such as libraries, resource centres and community centres offer occasional financial courses. If you aren’t comfortable or perhaps are embarrassed discussing your finances with a loved one, these are all options for getting non-judgmental financial advice.
Tip 3: Set a budget and don’t budge it
You’ve heard us say it before, and you’ll probably hear us say it again. When it comes to financial planning, a budget can be your best friend. Sometimes knowing where to begin with your budget is the most difficult part, but, after some self-education and self-reflection, you will have the financial literacy foundations to help get you started.
First, you’ll want to write down your income and your expenses. There are many free income and expense templates available online. There are also budgeting apps you can try, or you can simply jot it all down on a piece of paper. Once you have your income and your expenses laid out, you can then determine if there are additional funds that could be going towards financial goals. Are there ways you can cut down spending to put more money towards paying down debt or investing in your child’s RESP? Maybe you’ll discover that you have some extra money available that you can put towards an emergency fund or your retirement? Once your income and expenses are in check, use your budget to look at the big picture (your financial goals) to see what goals can be achieved and what changes need to be made.
Women may still not be on a 100% equal playing field when it comes to money, but we can take the steps necessary towards closing not only the wage gap but the financial education gap in Canada. With the proper knowledge, support and drive, any woman can begin to take positive steps towards controlling her financial future. And while we may be focusing on women today, it’s important to remember that financial literacy is beneficial to everyone, regardless of gender. To learn more about financial literacy and ways to improve your financial well-being, check out our other blogs or follow us on Facebook, Twitter, and LinkedIn.