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Improving Financial Literacy Is Easier Said Than Done

November 11, 2015

Getting smarter with money is amazingly difficult. That’s why Canada has dedicated an entire month (November is Financial Literacy month) to help us all do better with money. money and laundry quote

Why is financial literacy such common sense yet VERY difficult to practice?

Because we need to get (at least) 3 things right;

knowledge, skills and confidence to make responsible financial decisions

Let me add a 4th; motivation.

Without the motivation to act, even the best knowledge, skills and confidence are wasted!

In my experience, it’s confidence and motivation that trip people up the most.

The “soft” skills not the “hard” ones. Why save for retirement now when it’s 30 years away? Why not buy a bigger house or start the reno today while my family’s still young? A little more debt isn’t going to hurt us, right? Why bother investing when my income is so small? There are too many investments to choose from so I’ll just leave my money in the bank.

Valid points (but poor excuses).

It’s much easier to dig ourselves INTO a financial hole than out of it. Ask anyone who’s been there and they’ll tell you the initial fun was not worth the ultimate pain.

The simple act of talking about money can make a positive difference.

Sure, money is a touchy subject but we can discuss it in appropriate ways. Sharing the highs and lows of our own money stories really helps- we’ve all made our share of money mistakes! Learning how attitudes and emotions impact our behaviour towards money can shed light on why we do what we do with money (even when it doesn’t make sense). Do I spend money to cheer myself up after a bad day? Do I spend on things that matter to me (or do I even pay attention)? Do I have the right balance between spending today and investing for tomorrow? Does my upbringing affect the way I handle money?

Here’s yet another dilemma…

When it comes to personal finance, sometimes people don’t know what they don’t know.

Tough to ask for help if we don’t know we need it!?

Consider an investment in education- read, learn or tap into the many available resources out there. Just make sure the source is respected and objective.

Alternatively, Professionals can fill the knowledge/behaviour gap but WE must be ready to listen and act. For example, simple strategies to save tax can increase our wealth over time. Reducing our annual investment and debt costs (or tapping into “free” money) will do the same. Many of these actions feel painless once we start and get used to them.

Can you relate to any of these ideas?

Most people can, myself included. There’s always more to learn or do differently in the world of personal finance. But don’t mistake learning for complexity. We can all improve our finances AND still keep things simple. Strategies, like making the most of compound interest, are easy and timeless.

If you think you can take better care of your finances, please start NOW. Read, learn, think, review or enlist help. Wouldn’t it be great to stop worrying about money?

Keep your questions coming!

As mentioned in last week’s post, I’m answering all your personal finance questions this month. Please drop me a note and I’ll respond.

Proud founder of this blog Let’s Talk About Money, Patricia Gass, CPA, CA, provides personal finance coaching and education to improve your money skills. Follow her on linkedin, twitter or pinterest.

  1. This post hits the personal finance nail on the head! I definitely relate to not knowing what i don’t know and the best way to learn more is talking about my personal finances with my family and close friends. A buddy and myself always talked about coming up with a monthly budgeting plan together and are working on meeting over the winter class break to develop one. Learning about personal finance with someone who is on the same knowledge level as you makes it a lot easier to discuss the “touchy subject”.

    • Absolutely! Sounds like a great plan- good luck! Personal finance is still not taught in schools but is an important life skill.

  2. I agree with you. I think that motivation is a really hard thing for a lot of people when it comes to their finances. Keeping on top of it is a lot of work and definitely requires motivation. I’m lucky that my husband and I both have a real interest in personal finance, but I know we are not the norm. I have a really hard time getting motivated in other aspects, so I totally get how hard it is!

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