The Task Force defines financial literacy as having the knowledge, skills and confidence to make responsible financial decisions .
- “ Knowledge ” means understanding personal and broader financial matters.
- “ Skills ” are the ability to apply that knowledge in everyday life.
- “ Confidence ” means feeling self-assured enough to make important decisions. This is often a key factor in galvanizing people into action.
- By “ responsible financial decisions ,” we mean that people will be able to use the knowledge, skills and confidence they have gained to make choices that are appropriate to their own circumstances.
Barely a day goes by that Canadians do not have to make a financial decision of some kind or other. Some decisions are routine, such as what groceries to buy or whether to pay by cash or by credit card. However, others are more momentous, such as deciding to open a savings account, or to go away to college or university or to take out a first mortgage.
To make decisions, people draw on their existing knowledge in a particular situation and apply it in such a way that is appropriate to their circumstances.