When it comes to financial literacy, Canadian youth are among the best in the world. That encouraging finding is the result of the first-ever Canadian participation in a global assessment of youth financial literacy.
Canada came second among 15 countries – tied with Belgium – in the Programme for International Student Assessment (PISA) on financial literacy, recently released in Paris. Approximately 3,400 students from seven Canadian provinces took part in the survey, which is administered by the Organization for Economic Co-operation and Development (OECD).
According to the results, 87 per cent of these Canadian students demonstrated at least a baseline level of financial literacy, defined by the OECD as allowing them “to participate fully in modern society.” Twenty-two per cent of Canadian students demonstrated advanced levels of financial literacy – well above the OECD average.
These findings are a vote of confidence in our national strategy for financial literacy, Count Me In, Canada, and reflect the many efforts by provincial governments and other organizations to reach children and youth. Some of the more detailed findings point to the progress we’re making. They also reveal areas where we can further collaborate to build the financial literacy of our young people.
Canadian students who discussed money matters with parents tended to score higher, with those discussing money matters at home once or twice a week ranking the highest. This aligns with one of our ongoing messages: start talking with your kids about money early and do it often.
We know conversations at home are crucial, but how do we encourage them?
At the Financial Consumer Agency of Canada (FCAC), where I work, we have a host of trusted, unbiased resources available online. Two examples: our Teaching Children about Money page and our financial literacy database, which is a one-stop hub for programs and activities, many geared towards children and youth.
Another FCAC priority is increasing financial literacy programs for adults in the workplace, in part to encourage adults to share information with their children and to feel more confident in their knowledge about money matters.
We know giving adults a chance to improve their financial literacy will spark better conversations about money at home. To support this goal, we’ve collaborated with the Chartered Professional Accountants of Canada, who developed a financial literacy workshop now being delivered in workplaces across Canada. You can find a link to it on our Canada.ca web page for workplace financial literacy.
Another PISA finding suggests all these efforts are paying off: a majority of students demonstrated the capacity to delay gratification – a skill that’s associated with financial well-being. Sixty-three per cent of Canadian students said that if they didn’t have enough money to buy something they really wanted, they would save up to buy it. Another 17 per cent said they simply wouldn’t buy it at all.
This is a healthy indication that messages about saving for big purchases are reaching students early in life. This is good news, as studies show that saving and spending habits tend to be formed at a young age, and are related to good financial behaviour in adulthood.
The PISA study also found that youth with experience handling their own money demonstrated stronger financial literacy skills. Canadian students who held occasional jobs like babysitting or yard work had, on average, the highest financial literacy scores. We also know most Canadian teenagers hold bank accounts, and so they have some experience with financial products and services, which seems to help. We learn by doing.
We know there’s more work to be done to improve financial literacy levels. FCAC recognizes the need to evolve our understanding through research, in order to further improve outcomes in the financial literacy field. That’s why we’ve recently developed Canada’s National Research Plan for Financial Literacy 2016-2018 to act as a clear road map for the broad network of researchers in this area.
Perhaps the most valuable result of the PISA study is that it gives researchers a baseline for further evaluating the efforts to teach financial literacy to Canadian youth.
We’re off to a great start. Young people are the future of our economy and today’s teenagers are tomorrow’s financial consumers. With that in mind, the PISA results represent a big win for all Canadians and our economy.
Jane Rooney is Canada’s Financial Literacy Leader, within the Financial Consumer Agency of Canada.
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