Financial Literacy is Our Gift to Future Generations.

4 min readAug 24, 2021


Millennials missed the personal finance education boat. Let’s not repeat this mistake with future generations.

We’ve all been there before. Sitting through a class where the taught subject will likely have no impact or usage in our lives. And yet, we sit through these mandated classes because the schools we attend determine they’re needed.

But, what if children were taught something in school that they could take with them and apply in their lives?

One of the most significant shortcomings of the education system, especially in the formative years of learning, is the lack of financial education. This article will tackle what financial literacy is and how future generations could greatly benefit from learning about it at a young age.

Financial Literacy

At its core, being financially literate means that you have the ability “…to understand and effectively use various financial skills, including personal financial management, budgeting, and investing.”[Link]

Being financially literate takes time and understanding of financial concepts that many adults take for granted. It is about building a solid foundation for your knowledge of money and the power it has in shaping how you spend as you accumulate it.

Financially literate people can take this knowledge and apply it to effective financial decision-making, defined as “decisions that satisfy a given need.” [Link] Making financial decisions that satisfy a given need is crucial because being financially literate puts people in a better position to make more rational decisions when it comes to their money.

One of the biggest knocks on people today is the amount of debt they currently find themselves in. The average Canadian is now $73,532 in debt, which accounts for student loans, credit cards, personal loans, mortgages, and more. This is an increase of 2.2% from 2019 to 2020. [Link]

Being financially literate does not guarantee you will be debt-free for life, but it will make you a more conscious spender. Thus, rather than spending frivolously, having financial knowledge will likely ensure you are smarter with how you spend your money.

How to Determine Financial Literacy

The best way to know if someone is financially literate is to take a test. There are plenty of different financial literacy tests covering a range of up to 30 questions. The goal of these tests is to understand your knowledge of financial concepts and gauge how you would make informed and responsible decisions.

There are many resources online where you can take a financial literacy test. Most of these tests will feature different questions, but the test concepts will likely be similar across the various trials.

Here is a shortlist of online financial literacy tests you can take.


· Sunlife

· FINRA Investor Education Foundation

The Statistics

If you, as an adult, found it difficult to answer or even pass the financial literacy tests above, know you’re not alone.

In the United States, approximately four out of every seven Americans (~57%) are financially illiterate. [Link] The situation in Canada isn’t much better either, as only 60% are well-versed in personal finance. [Link]

Despite this bleak scene, there is hope for improvement. More and more schools are mandating that high school students take a personal finance course, as evidenced by a 24% increase from 2018 to 2020.

In Canada, statistics show that nearly half (44%) of all Canadians are starting to engage in financial education topics to improve their knowledge. [Link] These people have turned to many resources to gain this knowledge, including reading a book, taking a personal finance course, reading online resources, and more.

The relatively lackluster rates in financial literacy cause concern, but both Canada and the United States should be encouraged by the growing trends to combat this. With more courses being offered at an earlier age and more online resources, people who want to learn more about financial education now have more access to it than ever before.

Understanding Personal Finance is Important

Much like investing, the best time to start your financial literacy journey is as early as possible. At some point in life, adults will come face to face with many of the fundamentals involved in managing their money responsibly: risk-reward, debt, financial planning, investing, and so on.

These adults may know these individual concepts but not have a deep understanding of how they work together to create a broader financial picture. This lack of total money management can have devastating consequences. Example: Roughly 17% of Canadians spend more than they earn every month, while 27% borrow money to pay off their daily expenses. [Link] This should not be an accepted norm.

Learning about money at an early age will help youth grasp basic financial concepts and understand their impacts on everyday lives. According to, six primary reasons teaching financial education very early will empower youth when they enter adulthood. These lessons include:

· Learning and understanding the value of money.

· Debt management and prevention.

· Building a good credit score.

· Investing money to grow wealth.

· Avoiding common money scams.

· Attaining financial self-sufficiency.

Youths who can fully understand these financial lessons at an early age will be more inclined to make better financially sound decisions later on in life.




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