The vast majority of people who hear the terms “financial literacy” or “financial empowerment” simply hit the snooze button in their brain right after it’s mentioned. The other small minority of the population who actually care about financial literacy, or at the very least understand that it’s important, still remain in the dark when it comes understanding why it’s so important.
So here it is… access to a quality financial education, in my opinion, should be considered a basic human right. Financial education is a survival skill. You simply cannot thrive in today’s modern economy without an understanding of money.
In the 2016 Canadian Health Index Survey, participants indicated that financial issues were the top drivers of excessive stress, with 45 per cent of individuals experiencing uncomfortable levels of stress related to personal or household finances. Researchers have long understood the correlation between socioeconomic status and health outcomes, but what we haven’t explored enough is the role financial education can play in reducing stress and thus improving overall health and wellness.
Most people accumulate their financial knowledge through trial and error. Money is part of life, so we have no choice but to earn it, spend it and ultimately become familiar with it. But not everyone has the same access to financial education and thus not everyone has equal access to its advantages. We’ve all heard of the saying that the rich get richer and the poor get poorer, but do we know why this happens?
In my opinion it’s about exposure to opportunity. Higher incomes result in greater cognitive outcomes for children. Wealthier families are usually able to provide their children with a better education.
It’s not so much about the amount of money that one has or doesn’t have, but rather their ability to manage it.
We all understand that the more money a person earns, the better off they will ultimately be. To assume that a person cannot find health, happiness and well-being while earning a lower income is preposterous, just as assuming that money alone can bring someone health, happiness and well-being is also arbitrary.
So, perhaps it’s not so much about the amount of money that one has or doesn’t have, but rather their ability to manage it, grow it, budget it and ultimately control it. When we don’t allow all members of society to have equal access to financial education, we take away the ability for people to be healthy, independent and ultimately successful. This is why it’s so important that we have proper publicly funded financial education programs for youth.
According to The Canadian Research Data Centre Network living in low income for longer periods of time is more strongly associated with worse childhood outcomes. Let’s change the predetermined destiny for so many children who were born in the cycle of poverty.
Here are five reasons why access to financial literacy should be a basic human right:
1. You can’t teach what you don’t know
It’s so unfair to expect for children who come from families that struggle with money to break the mould. Caregivers are not able to set an example of proper money management, and discussions about financial health are few and far between. How can you place the burden of financial education on families that are burdened by a lack of financial education?
2. Physical health
We understand that financial wellness is linked to physical and mental wellness, so we must uphold our children’s rights to this benefit. A study has shown that drinking, smoking and obesity were all associated with debt and financial problems. When caregivers struggle with finances, this trickles down to their children through poor eating, a lack of opportunity for physical exercise (including extracurriculars) and issues surrounding vital organs.
3. The link between financial stability and mental health
Financial difficulty is linked to depression, suicide, anxiety and addiction — children who are born into financial difficulty without proper access to financial education are more likely to repeat the negative patterns and behaviours they’ve been exposed to growing up. In a the 2016 Sun Life Canadian Health Index survey, it showed that 45 per cent of individuals were experiencing uncomfortable levels of stress related to personal or household finances
4. Women (and girls) need it
Women without financial independence are more likely to find themselves in abusive relationships and/or stay in abusive relationships. Access to quality financial education for women and girls at an early age may be able to prevent some of these outcomes.
5. Benefits forIndigenous peoples
The Prosper Canada Centre for Financial Literacy has found that Indigenous people experience multiple socioeconomic barriers that affect their quality of life. Low-income, gaining and maintaining employment, and lower levels of educational attainment are barriers that span over generations.
It would seem inhumane to take away an individual’s right to education, yet we neglect to provide access to financial literacy, a necessity to survive in today’s world. In order to break the cycle of poverty, abuse, neglect and mental illness, we have to have a publicly funded education program for youth and we must support the creation of a Canadian Children’s Charter.
If we want a prosperous future, we have to invest in our next generation. Creating a Canadian Children’s Charter that includes an inclusive and differentiated financial literacy program can remove the shackles of financial burden for generations to come.
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Author: Children First Canada