When the mail comes, you flip through the stack: flyers, more flyers – and a bank statement. If you are like many Canadians, junk mail ends up in the recycle bag and the lone envelope finds itself in a stack on your desk, likely to be ignored until tax time.
It can be tough to look at your finances with a critical eye, especially when you’re not sure what you’re looking at. According to a national Ipsos Reid survey conducted on behalf of ABC Life Literacy last May, six in 10 Canadians – that’s more than 17 million people – say they need help with their financial management skills.
“Financial literacy is a person’s confidence and ability to look at their financial resources,” says Joanne Currie, director, financial stability and independence at United Way of the Alberta Capital Region. It’s not just about crunching numbers, but about having the ability to understand your habits and be intentional with your spending decisions.
“It’s important for people of all income levels to look at their relationship with money, how they spend and save, and what their goals are,” Currie says. However, a lot of people just don’t talk about money. This comes at a time when it’s easier than ever to acquire credit cards and other forms of debt.
Add in consumer pressures and it can make it difficult for people to avoid the credit trap. “There’s a huge pressure to consume, so to box that trend we have to really say, ‘I’m not going to consume, I’m going to figure out how to reuse or go without,’ ” says Heather Morrison, a social worker with the City of Edmonton.
Morrison chairs the Alberta Asset Building Collaborative (formerly the Financial Plus Collaborative), a 40-member strong collaborative of representatives from not-for-profits, businesses and government committed to financial literacy and asset development. The group was started when five organizations came together, committed to increasing the awareness of the importance of financial literacy and asset building. United Way joined in 2006. Since hosting a “Financial Works” conference in 2009, the collaborative has grown to more than 40 members and has trained 85 facilitators in financial literacy. They now work provincially and nationally on work related to financial literacy.
Educating all Albertans on financial literacy is important. Money matters to everyone, from families living on low incomes to young adults struggling to track their spending to new immigrants with no credit rating. Without financial education, it can be easy to overlook where money is going and difficult to make changes.
Inside the Classroom
On a Wednesday evening in January a group of women gather in a room at Candora Society, located in north east Edmonton. They’re sharing food, talking and preparing for today’s sessions about credit, taught by a volunteer who works in the business of debt consolidation and credit rebuilding. These women have varied backgrounds, ages and experiences, but they’re all gathered here – and every Wednesday for 14 weeks – to learn more about money.
Financial literacy, says Michelle Ackland of the Women’s Savings Group, is a topic that desperately needs to be talked about – to this group of women living in low income, and to everybody. “It’s just not there. We’re expected to learn by osmosis, and most times we learn it by making huge mistakes,” Ackland says.
Participants at the Women’s Savings Group learn skills, such as how to track their money and make a realistic budget. Guest speaker Troy Tisserand, managing partner at 4 Pillars Consulting, is at today’s class to talk about credit, including assessing credit ratings, putting together a credit rebuilding plan and protecting credit ratings. “We teach them the value of credit, that credit is an asset for you and when something happens it can be a buffer,” Ackland says.
The Women’s Saving Group has existed since 2007, but through a new initiative called EMPOWER U, the group will offer a matched savings component to participants, known as an Individual Development Account (IDA).
“IDAs are a way for people to practice saving and get a benefit out of it,” Ackland says. Asset accumulation helps people living in low income, as assets reduce financial strain and enhance economic security, while providing a buffer against short term financial crises.
The matched savings component of the program uses a 1:2 ratio to a maximum amount to help participants save toward a goal related to self-sufficiency. “It’s through these projects where people get to practice and learn that they can save,” Morrison says. “That’s one of the biggest hurdles; they believe they can’t save anything.”
EMPOWER U started this January and includes financial literacy programs delivered to women by different partner agencies, as well as the matched savings component. The program, supported by EPCOR, ATB Financial, United Way of the Alberta Capital Region, the Alberta Asset Building Collaborative and other partners, provides the tools and knowledge needed for participants to build financial stability and independence. Read more about EMPOWER U on page 30.
Financial literacy is a person’s confidence and ability to look at their financial resources.
The courses specifically target women, including women who are in low income, experiencing homelessness, leaving domestic abuse and high-risk lifestyles, and are new to Canada.
Financial literacy training is one strategy in a comprehensive poverty reduction strategy, says Currie. Not only does it help people make the most of the money they’re currently making, but it can lead to skill development and improved employment outcomes.
Programs that target women, such as the Women’s Savings Group and EMPOWER U, are a good investment. “We know that when we work with women, it’ll benefit the whole family,” Currie says. Morrison notes that the lessons learned often trickle down to children, who will be more likely to be financially stable when they’re grown.
Children of all backgrounds can struggle when it comes to financial literacy. “People are more likely to talk to their children about sex than they are about money,” Ackland says. “It is a desperate topic that needs to be talked about, to kids, to anybody.”
In the Capital Region, young adults learn financial skills through programs like E4C’s Kids in the Hall Bistro and the Youth Emergency Shelter’s Skills for Youth Program. “We’re bringing more awareness into what they think they know about saving money,” says Quena Sanchez, program supervisor at Skills for Youth, noting youth leaving an unhealthy home situation and living on their own for the first time are often unaware of all the expenses they face.
Calvin Avery teaches financial literacy skills to at-risk youth, like Logan Knight, in the Kids in the Hall Bistro program. The program, which is supported by United Way, provides on-the-job experience for youth in the downtown Edmonton bistro, located in City Hall.
Program manager Avery balances running a restaurant and catering business with teaching youth employment and life skills. As young people aged 16 to 24 work in the restaurant and receive a regular paycheque, the program’s leaders help with financial management skills. “It’s done on a small group or individual basis because all these youth have different needs,” Avery says.
Some youth have previously gained large amounts of money through illicit means and now, says Avery, they want to make an honest dollar. Those young people must learn how to live on less. Others have to learn to set boundaries with their money, as they may be the only person in their family earning an income and relatives are demanding of their money.
“The majority of our youth need to pay rent,” Avery says. “We teach them what you need to do with your money in order to have enough for food and to pay your rent and buy personal items, and we look at why you want to save.”
When a youth first enters the program, Avery says it’s not uncommon for them to receive their first paycheque on a Friday, spend it all, and come back on Monday asking for bus passes for the week. “We know we’re being effective when they’re not coming to us asking for extra money or advances or for bus passes,” he says.
Money also matters on the job, as youth gain an understanding of the restaurant business and basic work responsibilities. Avery recalls how on a recent shift, staff averaged 10 per cent in tips. “The next day the supervisor worked with them on customer service and they got 18 per cent in tips. We talked after about how customer service has an impact on how much money you can earn,” Avery says.
Avery, who has been with the program for all of its 16 years, acknowledges that there are hectic days like at any restaurant. But what keeps him coming back to the Bistro is knowing he has an impact. When past participants stop by the Bistro to say hello, it’s a sign the program is working. “Sometimes I don’t even recognize them when they walk through the door because they’ve changed so much,” Avery says.