2020’s Financial Literacy Month arrives in the heart of a pandemic
Financial literacy 101: tips for students
It is no secret that university students are a group that struggles financially. The coronavirus pandemic has not made this struggle any easier.
Financial Literacy Month, an annual occurrence in November for Canada, is once again at our doorstep. This year is Financial Literacy Month’s 10th anniversary, but it has arrived in the midst of a global pandemic, affecting the financial status of millions – including millions of Canadians and students – and the month is met with strain.
Only a few days ago, Prosper Canada released a study that stated that “more than 60 per cent of Canadian households carry debt” and that low-income households “spend 31 per cent of their income on debt repayments.” Coronavirus in particular has hammered Canadians’ finances, with a study done by the Canadian Press showing that 2 in 5 Canadians’ financial status has “deteriorated” thanks to the pandemic.
However, students seem to be in a unique position. Not only do students struggle with financial strain, but also a lack of proper financial literacy education. In 2018, the Organisation for Economic Co-operation and Development (OECD) conducted an international survey regarding the financial literacy abilities of students.
This study specifically focused on 15-year-olds. Teens in the assessment addressed topics such as dealing with bank accounts and debit cards, understanding interest rates on a loan, or choosing between a variety of mobile phone plans. It also mentioned that after surveying 20 countries, one in seven were “unable to make even simple decisions on everyday spending” regarding a wide variety of topics, such as purchasing a mobile phone plan, understanding interest rates, or understanding debit cards.
So, during a time of financial strain and stress, what can students do? Where can you go for further assistance if you are confused and in need of help? When you feel like you are out of control, finding a way to return to control can greatly help with stress. Finding control amidst financial uncertainty may help. Here is some need-to-know financial literacy information.
In specific, there are a few key things that students can do to feel better in control of their finances: track your finances, reassess financial goals and objectives, take steps to protect yourself from financial fraud, and – only if possible – set aside an emergency fund.
Track your finances. In the age of technology, there are a plethora of finance tracking websites and mobile apps that can help you not only track the amount of money you spend, but also break down where you spend most of your money, see any spending patterns you have been exhibiting, and can help you keep track of your in and out-take of money. Sometimes, a visual demonstration of your finances can make it feel more manageable.
While some banks may offer these options on their specific applications, a browse through Google of your specific app store may be able to offer you an app that offers you services you like and understand.
Consider your financial goals. Do you have certain bills you need to set money aside for every month? How many bills? What do they all add up to? By determining what you hope to gain by keeping better track of your finances, you will be able to find saving and spending methods that can help you achieve these goals. Do you want to gain a better understanding of your finances? Do you want to learn how to adjust spending habits? Are you looking to merely keep track of where you spend your money? There are all good questions to consider when feeling overwhelmed by financial strain.
With a great deal of our financial decision making occurring online, an important question is how does one protect themselves from fraud? The most common types of scams in Saskatchewan (based on complaints received by the Government of Saskatchewan) are phishing, service scams, prize scams, recovery scams, and extortion.
Phishing is when an individual pretends to be a legitimate organization in an attempt to get personal information out of the victim. Similarly, service and prize scams involve an individual who makes a fraudulent business offer (such as offering financial services) or prize offer (such as offering a trip to Hawaii) but where the victim must supply money upfront before the prize or service can be delivered. This is how the money is stolen in this instance.
A recovery scam involves a victim being scammed a second time. Once a victim has lost money, they may be approached by an individual claiming to work for a government or consumer agency that can help, but only for a fee. This money is then stolen and never returned. Extortion, the final type of common fraud in Saskatchewan, is when an individual illegally obtains money from a person or business through unfair coercion.
To avoid being scammed, you can visit aretheyregistered.ca which is a database of registered professionals that you are safe to send your money to. Additionally, if you believe you have been the victim of fraud and require assistance, you can file online at antifraudcentre.ca or you can contact the Financial and Consumer Affairs Authority of Saskatchewan (FCAA).
If you can, set up an emergency fund. Many students are in a position that makes spending and saving money difficult, especially thanks to COVID-19 and the cost of living and of tuition. If you are able to find spare change, consider putting it away somewhere. If you can, make saving work for you. Set aside change after a grocery trip, or make a point to put one dollar in your savings jar each month. Finances are unique to the individual. Find a technique that works for you.
For more information on Financial Literacy Month, or for more information on financial advice, visit the Government of Canada’s Financial Literacy Month webpage.