Financial Literacy In Ontario: Lack Of Skills And Education Contributing To Surging Consumer Debt

According to a recent Ipsos survey commissioned by MNP LTD., a large majority of Ontarians agree there is a lack of financial literacy amongst the public which is fueling the national consumer debt problem. This sentiment – which is shared by 83 and 87 percent of the public respectively – directs much of the blame toward the public school system, with nearly all respondents (95%) agreeing the curriculum needs to better prepare students by teaching financial literacy skills. More than four in five (83%) admit that they’d had more finance and economics instruction throughout their own education experience.

Ontario residents aren’t shy to admit they personally struggle with a significant knowledge gap. Little more than two in five (21%) believes they have strong financial literacy skills, while three in ten (33%) rate their knowledge as poor. These doubts are hardly individual either – with two in five (39%) believing their neighbours across the country have a strong grasp on key financial concepts.

Person calculating their bills and money

This lack of confidence makes sense of data from MNP’s most recent Consumer Debt Index which highlighted wariness around how Ontarians could cope with an unexpected life-changing event. Across the board, only about one-third of respondents said they are prepared to deal with a change in their relationship status such as a divorce (32%), unexpected auto repairs or purchase (35%), requiring three months off work due to illness (31%), a job loss or wage decrease (30%), a death in the family (31%) or paying for someone’s education (27%).

Long-term financial wellness depends on building a strong foundation and skillset early. It is the lack of these fundamentals such as budgeting that often lures people into unsustainable debts on credit cards, lines of credit, property and with predatory lenders – as they often don’t understand the costs and difficulty of repaying these debts before taking them on. Couple that with a sudden unexpected life event such as one of those above and the perfect storm for insolvency.

Ideally, Ontario residents would be proactively reducing their debt and setting aside between three- and six-months living expenses for an emergency. But those who are already deep in debt or unaware of their long-term financial needs are extremely vulnerable as it’s difficult to be proactive when you’re already struggling. Which speaks to another related issue: the need for more open conversations about financial wellness and to break down the stigma of asking for help. Getting people to access the many available resources depends on breaking down the shame, overwhelm and embarrassment of reaching out.

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About the Survey

The survey was compiled by Ipsos on behalf of MNP LTD between September 10 and September 17, 2018. For this survey, a sample of 2,003 Canadians from the Ipsos I-Say panel was interviewed online. The precision of online polls is measured using a credibility interval. In this case, the results are accurate to within +/- 2.5 percentage points, 19 times out of 20, of what the results would have been had all Canadian adults been polled. Credibility intervals are wider among subsets of the population.