The more you know: How financial literacy empowers newcomers to succeed in Canada
Published November 1, 2021.
Financial literacy helps us make decisions, big and small, which affect us every day. It gives us an understanding of how to save, how to budget and how to deal with debt. It starts with basic money knowledge like how to open a bank account and evolves into knowing how to manage our household expenses and provides skills to help us determine if we can afford to buy or rent a home, take on a loan and plan for retirement.
Windmill Microlending partner, Prosper Canada, is working to strengthen financial skills and knowledge of newcomers, and other groups, in recognition of the critical role financial literacy plays in empowering new Canadians to achieve financial wellness and success.
Janet Flynn, Prosper Canada’s Senior Officer, Program Delivery and Integration says financial literacy is about building knowledge and capacity in the areas of budgeting, managing money, savings goals, debt and credit management, financial planning and investing for the future. It also enables individuals to set career goals, support life transitions and be less vulnerable to financial fraud. For example, many newcomers who receive fraudulent calls claiming to be from Canada Revenue Agency (CRA) may not be aware that the CRA doesn’t have the authority to threaten or arrest individuals and that such calls should be ignored.
The Government of Canada recently set a goal to strengthen financial literacy for all Canadians in the next five years. This is particularly important for immigrants and refugees who often struggle in their first years in Canada. They often need to make complicated financial decisions while at the same time, learning about the country’s financial, legal and tax systems.
What’s your financial literacy persona?
Prosper Canada’s research indicates newcomers come to Canada with different levels of financial knowledge, and factors ranging from language skills and cultural norms, to the size of their social network, all which can affect their levels of financial literacy. The organization has identified three different kinds of newcomer “personas” reflecting these different levels.
The “Survivor” is most concerned with meeting their basic needs and requires assistance boosting income and help navigating the Canadian financial system.
The “Seeker” has a desire to improve their money management skills and is focused on setting financial goals as well as creating actions plans while remaining open to receiving information to help navigate the financial system.
The “Thriver” is looking to attain bigger financial and career development goals while seeking more information on financial products and money growing options.
Flynn says regardless of which persona you fall into, newcomers benefit from strengthening their financial literacy because it helps them build financial security. Improved financial literacy can help individuals access benefits and tax credits to boost income; take advantage of safe and affordable financial and credit products and services; and, it supports saving and asset building while increasing consumer protection to reduce financial risk.
Resources for financial planning and to build your financial literacy
Flynn suggests newcomers connect with local settlement agencies and other organizations offering services. “Many agencies offer financial literacy workshops, financial coaching, tax clinics, access to benefits and other helpful programs.”
At Windmill, our client success coaches, provide custom supports, including career success plan development, career path guidance and referrals. Windmill coaches receive financial literacy training from Prosper Canada, and share that knowledge with clients who also gain access to tips, strategies, tools and resources.
Prosper Canada offers several free resources to build newcomer financial literacy and money management skills:
My money in Canada – Develop healthy money management habits with a financial wellness checklist, step-by-step learning modules and newcomer experience video.
Managing your money – A series of worksheets to help individuals and families set financial goals.
Soaring with savings – Worksheets to help you think through what kind of saving is important for you.
Dealing with debt – A set of activities to help you manage debt, identify your money priorities, calculate what you owe and strategize how you can pay it back.
To strengthen your financial literacy skills and knowledge, read other stories on the Windmill blog.