November is Financial Literacy Month

Published On November 8, 2013 | By Joseph (Ken) | Debt

CreditWhat is Financial Literacy Month in Canada?

The Parliament of Canada declared November Financial Literacy Month (FLM), and all month long, organizations from the public, private and voluntary sectors work together to raise the profile of the importance of financial literacy in today’s world, to show Canadians the benefits of financial literacy in their daily lives and the real dangers they face without it.

In the theme of November being Financial Literacy Month here are the 5 most common financial mistakes people make.

1) Not saving for emergencies – 49%

About half of Canadians have saved enough to handle emergencies

“According to the survey, 51 per cent of Canadians have three months of expenses set aside.”

The reverse being 49% of Canadians don’t have enough savings set aside.

2) Living pay cheque to pay cheque – 42%

42 per cent of Canadians living pay cheque to pay cheque

“The survey, released Wednesday, says 40 per cent of employed Canadians are spending all of — or more than — their net pay.”

3) Living on borrowed money (aka the never-ending loan) – 36%

Credit Cards: Statistics and Facts

“Since more than 64% of Canadians pay their credit card balance in full each month” the reverse is 36% of Canadians don’t.  The never-ending loan can also take the form of payday loans and living in your overdraft.

4) Treating Your Home Equity Like a Piggy Bank – 24%

Nearly a quarter of Canadians are debt-free, while others owe more

“Twenty-four per cent of Canadians say they eliminated their non-mortgage debt in 2013” and “They are shifting their unsecured debt to secured debt.”

Q: Should I Turn Unsecured Debt to Secured Debt?

“A: It is never a good idea to turn unsecured debt into secured debt.”

5) Overdrawing your account and paying excessive bank fees – 20% 

Overdraft fees cost bank customers hundreds a year

“While one in five checking account customers overdraw their account, many are often repeat offenders — spending far more than the average overdrafter.”

 

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About The Author

Joseph (Ken)
(Ken) is a Registered Public Accountant with over 25 years of public practice experience in the accounting profession. Ken specializes in accounting information systems, taxation and financial reporting.

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