With Canadian household debt reaching an historical high, one author believes the way overturn the trend is by teaching financial literacy to children.
Entrepreneur and author Teresa Cascioli is penning a children’s book series called M is for Money, and she’s partnered with FirstOntario Credit Union to distribute it to customers at its 32 Golden Horseshoe branches.
Cascioli, who, as CEO of Lakeport Brewing, turned the company profitable after it languished in bankruptcy, is as financial literate as they come. She says people who understand the value of money not only make better employees, they lead frugal, responsible lives.
Statistics Canada recently released numbers elucidating just how indebted Canadians are, and they indicate a bleak, if not worrying, future could be on the horizon if left unrectified. For every dollar of disposable income, $1.71 is owed by Canadians; and of the $2.1trln of collective household debt in the country, mortgages comprise $1.3trln.
Cascioli thinks education can help Canadians reverse course.
“Research has shown that if you teach kids these fundamentals, they stay with them all their lives, so I decided to target five- to nine-year-olds,” she said. “You’re not doing it one book at a time, you’re attracting a community of people at FirstOntario’s branches each time a parent or grandparent opens an account. They’ll get these stories.”
The M for Money series follows twins on their financial adventures where they learn about, among other things, budgeting, saving and taking out loans.
“These are things that can start a conversation between a child and their parents about money,” added Cascioli.
While teaching children financial literacy is important for the world of tomorrow, the new B-20 rules have made budgeting crucial.
“Given new rules around the stress test, if you aren’t frugal and understand how to budget, and you don’t understand how to save money and things start to tighten, you might have a hard time meeting your mortgage payments,” said Cascioli. “It’s really important to understand how to save money. God forbid interest rates go up, then what are you going to do? Financial literacy is important at all ages.”
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Majority of Canadians do not use the internet to do research on financial products