Recent studies report that many Canadians lack the knowledge needed to make well informed financial decisions.  A May 2017 Ipsos poll revealed that 78% of Canadians believed they were financially literate.  However, when asked to complete a basic financial literacy test 6 out of 10 failed.  When broken down by age, failure rates were:

• 48% of Baby Boomers  
• 55% of Generation X  
• 69% of Millennials

Current research indicates that financial guidance and learning is not happening as early as it could be.  Most financial education takes place informally and is often guided by family members.  We touched on this in our blog: The largest transfer of wealth is going to happen over the next few decades - Are you prepared?

At Hayes Vickers Private Wealth, we have been long time advocates of financial literacy for our clients.  With recent research, we are recognizing the importance of supporting our clients in educating the young adults and children in their lives to help set the stage to make successful financial decisions throughout their lives.  

A 2017 report by Canadian Payroll Association saw 46% of Canadians admit to delaying retirement due to not enough savings, while 1 out of 4 Canadians were unable to come up with $2,000 to cover an emergency expense.  Both financial literacy and planning are key to avoid these problems.  We believe understanding core concepts will help build sound financial management skills for youth.  Below are some key financial literacy principles that we encourage you to share with the young adults in your lives.

1. Budget your money - Tracking your cash inflows and outflows allows you to pay yourself first.
2. Taxation - it is important to understand your true earnings and how they are taxed.
3. Borrowing - making sense of your credit score and sources of borrowing is crucial as not all money is created equal.
4. Planning and mapping your goals should be done at all stages of life
5. Invest to achieve your goals.  Matching the right investments to your financial vision.
6. Prepare your estate to protect yourself, your family and all of your assets.

For a more detailed overview of these 6 principles we encourage you to review the article 6 Financial literacy principles.

Hayes Vickers Private Wealth has successfully been hosting a series of quarterly web seminars where Kieron Hayes and Nicky Rowson have been educating our clients, their children and grandchildren to be better prepared to manage their financial affairs.  Our next webinar will be held in September and will explain investment income.  If you would like to be notified please email Bryan Gagnon.