T he President’s Advisory Council on Financial Literacy defines financial literacy as “the ability to use knowledge and skills to manage financial resources effectively for a lifetime of financial well-being.” The United States has the most prosperous economy in the world (Canada comes in at a robust tenth). In these strong economies driven by financial prosperity, you’d think that most citizens are at least modestly competent when it comes to understanding and managing personal finances. They’re not. Nearly 80% of Americans 1 and 51% of Canadians 2 live paycheck to paycheck. Canadians owe about $1.70 to debts for every dollar they earn. 3 And 39% of Americans have exactly zero dollars saved. 4 How can people be so financially fragile in such wealthy countries? The problem doesn’t stem from not earning enough money. Rather, it’s a problem of managing money. You can’t manage money if you don’t speak the language, so to speak. With 43% of Americans and 32% of Canadians classified as financially illiterate, 5 it’s apparent where the disconnect is happening. We take for granted how important literacy is. Reading and writing is considered a necessary skill that is taught to children in the earliest years of formal education. Low literacy rates are linked to high poverty rates and high crime rates. We champion literacy in our homes and in our schools because we know how critical it is. IF ONLY WE WERE SO PASSIONATE ABOUT FINANCIAL LITERACY Get Smart to Get Ahead
36 MARCH 2018 | MELALEUCA.COM
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