My finance view

A task force, named last month, will give recommendations on how to make Canadians more capable with their money.

"The task force will draw on global best practices and build on the strengths of successful initiatives already in place in Canada," says its website, www.financialliteracyinCanada.com.

Other countries are already working to strengthen citizens’ ability to manage their personal finances.

Let’s start with the United Kingdom, which set up the Financial Services Authority in 2000 with a mandate to regulate industry and educate consumers.

Its website, www.moneymadeclear.fsa.gov.uk, has a slogan: "No selling. No jargon. Just the facts."

Information is organized by topics and life stages – starting a job, having a baby, separation and divorce – and managing in retirement.

You can reach more people using a life cycle approach, says a report done in 2007 for the Financial Consumer Agency of Canada.

"The major points in people’s lives constitute an ancient and powerful organizing model that societies use consciously and unconsciously," said author Larry Orton in Financial Literacy: Lessons from International Experience.

"And there is little doubt that, as individuals approach and enter a new phase, they have a heightened willingness to take on the learning needed for new responsibilities."

Britain also helps parents save for their children’s future by giving them seed capital.

All newborns receive a voucher for £250 (worth about $455 Canadian) and double that amount for the poorest families.

Parents can invest the money tax-free and add spare cash to the account, which later becomes their children’s property.

The Child Trust Fund, launched by then-chancellor Gordon Brown in 2005, is a way to help families build sums for toddlers that will reach four figures by the time they reach their 18th birthday.

In New Zealand, the job of improving financial literacy was handed to an independent crown body, the Retirement Commission no fax payday loans.

It had a brainwave of using a simple, one-word brand to promote its activities.

"Think of Sorted as your financial personal trainer," says the website, www.sorted.org.nz.

The Retirement Commission offers education tools for ages 5 to 95.

It also uses TV ads to create a demand to get financially "sorted."

New Zealanders were tested for their financial knowledge and attitudes in 2005.

The survey sets a benchmark to be used for future tests every four years.

In the United States, the President’s Advisory Council on Financial Literacy was created in January 2008 by George W. Bush.

A baseline survey of 25,000 Americans, administered in English and Spanish, is being done to help decide how to set up education initiatives.

Meanwhile, the Financial Industry Regulatory Authority has excellent resources at its website, www.saveandinvest.org.

In April of this year, the U.S. government sponsored a financial literacy month.

"It is more important than ever to understand how to balance a cheque book, budget wisely, plan for retirement and avoid accumulating debts that could harm your financial future," said President Barack Obama in support of the event.

"We must pass along such fundamental knowledge to our family and friends, because financial literacy empowers all of us."

But how can we ensure that knowledge is passed along?

Many people never learn the basics of personal finance from parents or teachers.

They pick up information only by trial and error – by making expensive and often tragic mistakes.

Next week, we’ll look at the limitations of financial literacy in a complex economy.

Ellen Roseman’s columns appear Wednesday, Saturday and Sunday. She can be reached at eroseman@thestar.ca

Source