Can Financial Literacy Save You Money?

Financial Literacy Leader Position Created by Federal Government

Financial literacy is something that doesn't keep most of us awake at night, but it probably should. The more informed we are about finances, the more control we have over our lives. The federal government recognized this and surveyed Canadian financial literacy in 2009. The results ranged from comforting to disturbing. The survey was scored on an index between 1-100 on five different aspects of financial literacy, and the results were:

• Making Ends Meet: 80
• Keeping Track: 66
• Choosing Products: 70
• Planning Ahead: 61
• Staying Informed: 39
  

While most Canadians are clearly making ends meet, we’re scoring low grades at staying informed, planning ahead, or keeping track of our finances. The government also appointed a task force for financial literacy in 2009, and their results were turned into a report issued in 2011 that gives an excellent top-down picture of how Canadians manage their money, including personal finances, investments, and insurance.

Financial Literacy Bill C-28

One of the pieces of advice of the task force was to create a leadership role for financial literacy at the Financial Consumer Agency of Canada, which oversees the behaviour of financial agencies and ensures that they conform to legislation and regulations. Bill C-28 was signed into law at the end of March 2013, which created a leadership position within the agency specifically for financial literacy. Educating Canadians about finances is just as important as regulating financial service agencies, since deceptive marketing practices usually skirt the law but can be detected by the informed consumer.

Financial Literacy and Your Insurance

The Insurance Bureau of Canada (IBC) welcomed the move in a press release. Chris White, its vice-president of government relations, stated:

"With a little more knowledge people can often reduce their insurance costs and improve the protection for their most valuable possessions - their cars, homes and businesses".

The report goes on to say "We are hopeful that a financial literacy leader for Canada will help us carry that message forward, and we very much look forward to working with that leader in the future".

IBC has created an excellent website to help better inform consumers about insurance at getintheknow.ibc.ca. The site hosts a wealth of interactive information about insurance, including an interactive game called the "Dry House Challenge". It is actually kinda fun, go ahead and click on the image below!

Financial Literacy and Your Insurance Broker

While insurers do their best to educate their clients, there is no greater financial literacy resource for you in the area of insurance than an insurance broker. Information on a website can be misunderstood, terms of a policy can be misread, but a face to face or phone conversation with a broker can clear everything up that you need to know right away. Realistically, most of us aren’t going to read up on everything we need to know about insurance because we don’t have time. Your broker is a walking wealth of information for you and a translator for the thick terminology of the insurance industry. Better yet, they aren’t representing the interests of one insurer, so you’re certain to get the facts you need without any spin that will point you towards one particular company. You’ll just get what you need.

If you’d like to ask any questions about insurance, our friendly staff can answer anything for you, and it doesn’t matter if you’re a client or not. We’re pretty confident we can win you over with our experience and eagerness to help.