Financial Literacy: Strategies to meet the needs of low-income Albertans. Report from Social and Enterprise Development Innovations, June 2009.
Everyone is talking about money these days. Or rather, everyone is talking about lack of money; the last eighteen months have proven difficult for most Canadians. While financial literacy is not a new idea, it has received attention as the general public realizes they might not be making the best financial decisions. We are not as financially literate as we could be.
Social and Enterprise Development Innovations (SEDI) is a Canadian non-profit organization dedicated to helping low-income Canadians achieve economic self-sufficiency. Their work spans areas including financial literacy, asset building, and entrepreneurship. Briefly defined, SEDI is working from the premise that the goals of financial literacy are to increase financial knowledge and change financial behaviour. The Alberta Ministry of Employment and Immigration asked SEDI to look at financial literacy in Alberta, more specifically how it is effective and could improve the lives of low-income Albertans.
This project resulted in Financial Literacy: Strategies to Meet the Needs of Low-Income Albertans, a report that surveys best practices in financial literacy programs and policies around the globe and within Alberta. It contains feedback from program participants on how policies and strategies can be most effective.
Around the world
Internationally, New Zealand has taken the lead in successful financial literacy programs and policies. They are one of a small number of countries that has conducted a national financial literacy survey (Statistics Canada is currently working on a similar project); this survey indicated which demographics have lower levels of financial literacy. The data collected has been used to create a national strategy, which focuses on inclusion of financial education in school curriculum, provision of adequate information for any citizen faced with financial decision, and promotion of financial literacy programs in the workplace. The strategy focuses on teaching financial literacy at every age, with the recognition that financial habits develop early in life.
Hallmarks of a good national strategy
Programs in the UK, USA and Australia are also examined. Successful approaches to financial literacy in all these countries have several characteristics:
- Attitudes that financial literacy is a basic skill needed over the course of one’s life
- A national survey to create a baseline measure, with follow-up surveys every few years
- Multi-sectoral strategies, in the form of partnerships with many types of organizations to reach all audiences
- Ongoing program evaluation
- Information and programs are provided free of charge In Canada
The Canadian government invested five million dollars in financial literacy over the course of 2007 and 2008, through the Financial Consumer Agency of Canada. Several other organizations, including the Canadian Foundation for Economic Education, SEDI, the Canadian Centre for Financial Literacy, and the Joint Forum of Financial Market Regulators, are also involved in financial literacy program and policy development. The only province to currently boast financial literacy components within school curriculum is British Columbia. Several programs have been developed to target low-income Canadians who aren’t in school in major cities such as Ottawa, Winnipeg, Toronto, and Vancouver, in conjunction with the YMCA, CIBC, and other local organizations.
Here in Alberta, organizations in municipalities across the province have set up financial literacy programs for their clients and other low-income earners in their communities. In Edmonton, the Candora Society’s Women’s Savings group focuses on strategies for saving money and connecting to community resources. The Edmonton Financial Literacy Society creates financial literacy curriculum tailored to several specific target audiences, such as aboriginals or immigrants. In Calgary, Momentum has programs to help low-income earners better manage their resources to achieve financial self-sufficiency.
As a result of recent economic events, approaches to financial literacy have become more reactive rather than proactive. It is important that policy developers keep in mind the need for proactive strategies even as they deal with current crises. Recent events have also proven that, while financial literacy education is crucial, regulation and public policy to protect consumers must also be in place.
This report contains solid grounding on the ingredients of sound financial literacy policy, and feedback from program participants will provide the Alberta Ministry of Employment and Immigration with insight into the barriers program developers and participants may face.
Read this report if you are involved in financial literacy program or policy development and delivery; if you are working to improve the lives of low-income Albertans; if you are interested in financial education.
Visit our library catalogue to find this publication in our library or online. For more information on SEDI’s own perspective on financial literacy, visit their website at www[dot]sedi[dot]org, or check out some of the following publications (available online or through the ESPC library):
Financial Inclusion for Homeless Persons and Those at Risk. SEDI, 2008.
Delivery Models for Financial Literacy Interventions: A Case Study Approach. SEDI, 2008.
Financial Capability: Learning from Canadian Communities. SEDI, 2006.
Review by Jennifer Hoyer