Valley First

Financial Literacy Key
For Young Families

Financial literacy key for young families as over one third fail financial literacy assessment
November 14, 2013

Penticton, B.C.—November marks Financial Literacy Month in Canada and this year’s theme—Financial Literacy across Generations—encourages Canadians of all ages to prepare for a brighter financial future. And, recent information shows more preparation is required.

While 90 per cent of Canadians gave their financial acumen a passing grade, when given a financial literacy assessment, over a third of those who had given themselves a passing grade failed the test. Valley First’s Geoff Willers says it’s important for all Canadians, particularly young families, to boost their financial acumen and make their finances a priority.

Educate yourself—and make a plan
“When you’re juggling careers, kids and other responsibilities, personal finances can easily be overlooked,” says Willers. “It’s critical you take the time to make a financial plan and understand your finances. If you find any of your finances confusing, it’s time to visit an expert at your financial institution. They’ll help you understand where your money is going every month and set you toward your financial goals”

Focus on debt reduction
A recent study showed that personal debt, which is debt that does not include mortgage debt, is on the rise—particularly in Western Canada. The average personal debt load level in B.C. now stands at more than $38,000.

“When taking on debt, you should understand the true cost of that debt, interest included,” says Willers. “Credit cards come with steep rates that can cause a small purchase to become a large one once interest costs are factored in. Make a list of your debts and focus on paying them off—making sure you pay off the debt with the highest interest rate first.”

Prepare for retirement while there’s still time
When it comes to saving for retirement, Willers says the earlier you start saving the better. With only a quarter of Canadians believing they are putting away enough to meet their retirement goals, the time to save is now.

“Young families have a lot of financial priorities—it’s an expensive stage of life,” says Willers. “But, saving for retirement should be near the top of the financial priority list. I recommend that people open an RSP account and start putting money away every month as soon as they start working. This not only starts building a retirement fund, it also starts a great savings habit.”

Pass it on to your children
Studies show that only a third of young Canadians have regular talks with their parents about money and finances and approximately 30 per cent feel that their parents have financial problems.

“Children are very aware of their parents’ actions and are likely to repeat their parents’ spending habits,” says Willers. “Talk to your children about your finances to increase their financial literacy and—most importantly—set a good example to help set them up for success.”

About Valley First

Valley First is a division of First West Credit Union, B.C.'s third-largest credit union, which has 40 branches and 29 insurance offices throughout the Lower Mainland, Fraser Valley, Kitimat and Okanagan, Similkameen and Thompson valleys. Led by Launi Skinner, First West has $7.1 billion in assets under administration, more than 171,000 members and close to 1,300 employees.

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