Open your eyes to financial literacy activities across the globe and you’ll see that Ontario (and Canada) is making progress when compared with many other jurisdictions. On a global basis, the combined efforts of dedicated non-profit and government organizations, including Investor Education Fund (IEF), the Canadian Foundation for Economic Education, the Financial Consumer Agency of Canada, the British Columbia Securities Commission and others have resulted in a number of top-tier initiatives at the forefront of financial literacy education. As a jurisdiction, we’ve taken some good first steps.
There has been a lot of anecdotal support for our efforts – including from peers in other countries and through conferences and other international relationships. There are now more relevant qualitative data as well.
One specific source that supports my view is a study published in June by The World Bank (WB), titled “Financial literacy around the world: an overview of the evidence with practical suggestions for the way forward.” It is a policy research working paper, so it is not light reading, but it does provide useful context and helpful insights.
Neither Canada nor Ontario is mentioned in the paper, which comments on financial literacy in developed and developing countries as well as some internal states/administrative areas/regions. However, since we’re starting to implement the policies, standards and practices the paper recommends, we’re clearly among the leaders in this field. To support that claim, speaking from IEF’s perspective, here are select WB recommendations and corresponding examples of what IEF does to foster financial literacy among Canadians:
Leverage social networks and peer effects
At IEF, we know there’s a social dimension to instilling financial literacy. We’re working to foster an engaged social media community through our blog, Facebook, Twitter and YouTube by creating content that is appealing, engaging and shareable. Our Masters of Money blog, which features some of Canada’s best-known personal finance experts, is a great example of this.
Identify and target vulnerable populations
GetSmarterAboutMoney.ca has rich resources to help Canadians of different backgrounds and at various life stages. One way we do this is by providing funding to community organizations for financial literacy projects that serve unique needs. For example, IEF provides funding to organizations such as the Jewish Vocational Services Toronto – an organization that provides employment, educational and social support programs and services. IEF’s funding supports financial literacy workshops and one-to-one counselling services for a diverse group of clients, including newcomers, women, at-risk youth, people with disabilities and low-income individuals across the Greater Toronto Area.
Be creative with the delivery format of financial education programs
Since the WB paper mentions computer games as a teaching tool, I’ll mention the Cranial Cash Clash, which allows players to test their financial knowledge in a trivia-style game. From its launch in January to the end of June, there have been more than 20,000 play-throughs. Another strong example is the Funny Money program, which teaches the basics of personal finance through high school assembly programs delivered by nationally recognized comedians.
Pay attention to the curriculum
Our core mandate is to educate Ontarians about financial literacy. As I mentioned in my post of June 6th, IEF was a key player in bringing financial literacy to Ontario’s schools. Right now, we’re preparing to launch lesson plans and teaching tools that give real-life application to financial concepts in a broad variety of school subjects. Encouraging teachers to implement our new lesson plans will be a priority for the balance of this year.
There are many more examples from IEF and other Canadian organizations working in this area. The lesson learned – not just from this report but from our general monitoring of worldwide developments – is that in Ontario and Canada, we’ve made strong strides in improving financial literacy compared to other countries. But make no mistake – we’re in a marathon, and we’re only a few metres into the race. Judging from the state of Canadian household finances, we still have miles to go before we reach our goal.
Our financial realities are changing. We have easier access to credit and more complex investment decisions than ever before. Our societal inability to cope with this responsibility is quantified in study after study, and this problem won’t go away unless we address it throughout the education system and beyond.
We’ve taken the first steps down a long road, but we need political and institutional leadership to keep heading in the right direction.
That’s my take. What’s yours?
President of IEF