Financial Literacy for Youth

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It’s an age-old dilemma: how to convince strong-willed teens that they must master an important subject, even though it seems to lack relevance beyond the classroom. You know the familiar protest: “When will I need this in the real world?”

But of all the subjects in which educators struggle to spark student interest, money management should require little convincing. Today’s youth quickly develop a keen interest in money—or at least ways to spend it. Youth conversations often gravitate to the latest video game, cell phone or fashion item they covet.

Despite this unquenchable thirst among teens to talk money, basic financial lessons are often omitted from the curriculum and young people are left to learn these essential life skills the hard way—after they’ve racked up years of debt, or fallen victim to financial fraud.

Canada’s Failing Grade in Money Skills
Statistics clearly indicate that many Canadians lack financial literacy, that is, the ability to understand, analyze and use information about financial decisions in day-to-day life. For example, from an array of recent surveys, we know that one-quarter of adult Canadians have no savings for the future; more than a third of credit card users don’t know their card’s annual interest rate; less than half realize that interest is charged on cash advances; and 60 percent admit that they find most financial information hard to understand. One of the reasons: fewer than 2 in 10 persons recall having taken courses in personal financial management in secondary school.

The dangers of this financial literacy vacuum are alarming. With the financial services world growing more complex, Canadians are at risk of making costly mistakes with serious long-term consequences. While this is especially true for low-income families, lack of money sense affects people at all income levels.

New Focus: Reaching Youth
Thankfully, things are changing. Since the federal government founded the agency in 2001, the Financial Consumer Agency of Canada (FCAC) has pioneered some clear and easy-to-use print and web tools to give consumers objective, reliable information on financial issues such as bank accounts, credit cards and investments. And recently, the government of Canada mandated the FCAC to foster financial literacy in youth. This means we can give all young Canadians a foundation of basic financial knowledge that will point them on the right path and help them avoid serious problems later.

That’s why we’re launching a comprehensive web-based tool this fall to help youth acquire crucial financial know-how. Named The City: A Financial Life Skills Resource, this unique bilingual program was developed in partnership with the British Columbia Securities Commission, and modeled on their successful initiative currently used in BC high schools.

The City: Youth Explore a World of Money and Temptation
After carefully listening to the feedback and priorities of teachers across Canada, we’re really excited that The City will be an invaluable and easy-to-use resource for educators who teach grade 10 and above.

Why take your class to The City? Designed for either in-class or self-guided online use, The City’s approach blends fictional characters with real-life financial activities and decisions, organized in hands-on, activity-based format. Eleven modules introduce key financial topics, starting with the basic lesson of distinguishing needs from wants. Along the way, students learn from eight life-stage characters—a collection of reality show style personalities who face various financial circumstances.

And while The City promises to be a bustling, urban jungle for youth, it offers a metropolis of benefits for time-pressed teachers. Easy to grasp and deliver, the program can be adapted to any classroom and includes downloadable lesson plans, student handouts and on-line modules. It’s free of charge and meets the learning outcomes related to financial literacy in every province and territory.

FCAC is also offering optional teacher training workshops, so that educators—some of whom may doubt their own financial savvy—can become comfortable with The City’s topics, or discover ways to incorporate the flexible modules into their existing lesson plans.

Impressive Results Among Youth
Since The City was rolled out to more than 1,400 teachers in all 60 British Columbia school districts, it has received rave reviews and has won multiple awards.

The City can have both an instant and a lasting impact on young minds, since becoming financially literate will deeply affect their long-term financial health. Like learning the ABCs or how to floss your teeth, this program teaches practical skills they’ll use every day of their lives.

And if a world-weary teen still poses the challenge, “Why do we need to learn this?” simply nod at the classroom panorama of Nike sneakers, ipods and dog-eared fashion magazines. Even skeptical youth will grudgingly admit that learning money basics will get them closer to the “sky’s-the-limit” dreams they hide under a cool, branded ball cap.

To find out more about The City, visit www.themoneybelt.ca—FCAC’s financial education website for teachers and youth.