Financial education – filling the gaps

Welcome to the “back-to-school” issue of GO with Eckler. We hope everyone had a lovely summer and are well-rested for the months ahead. If you’re among the many Canadians with children in your life — whether your own, grand kids, nieces or nephews — heading back to school, you’re more than likely familiar with both the feelings of relief and the dread of the expense. And that brings us to our favourite topic: financial wellness. In this issue of GO with Eckler, we’ll connect the dots on our “back-to-school” theme with a quick look at the current state of financial education in Canada and a review of why it’s so important for employers to help fill the gaps.

We are pleased that Canada has increasingly recognized this need and the importance of financial literacy as an essential life skill. Most Canadian provinces and territories include some form of financial literacy in the standard curriculums for math, social and business studies starting as early as grade school and a few provinces (Quebec, Ontario and Saskatchewan) have, or will have by 2026, mandatory personal finance components as part of their high school curriculum. While the specifics vary from region to region, a shared commitment prevails: to ensure young Canadians are equipped with the knowledge and confidence they need to navigate the complexities of modern financial life.

The curriculum includes some of the basic building blocks for financial literacy including budgeting, credit and debt, investing and financial planning. These are certainly important concepts and ones that can be most immediately impactful for those graduating high school and perhaps learning to manage their own money for the first time. However, as retirement and financial wellness experts, we can’t help but wonder: “where’s the math?”

While we are hopeful that the curriculum will evolve, and even perhaps be more defined for specific age groups and demographics, given the complexities of the current financial landscape and its impact on individual Canadians, financial literacy must also include knowledge about, and the practical application of, the very real-world impacts of the time value of money (i.e. dollar cost averaging and compound interest) and the impact of inflation. Understanding and knowing how to apply “the math” is critical to setting (and resetting) financial goals throughout a lifetime – and achieving them.

Remember that old adage about money not growing on trees or the one about looking after the pennies so the dollars will take care of themselves? While many of the not-so-young among us rolled our eyes every time an adult said that to us, it was an essential part of our learning and of a time when many did the budget at the kitchen table and still balanced the dollars and cents in a physical cheque book. Inherent in those seemingly mundane tasks are important lessons and life skills – lessons and life skills that were often passed to the next generation. Today, in an era defined by digital transactions, online banking, and evolving financial landscapes, many of those opportunities for teaching financial literacy – and the “math” – to the next generation, have been lost. Research shows that a significant number of Canadians don’t know how much they need to save for retirement and fear running out of money in their retirement years. That is neither good for Canadians nor Canadian employers.

From the classroom to the meeting room

By introducing financial concepts early, Canadian educators aim to cultivate not just numeracy, but sound judgment, self-discipline, and confidence. Research suggests that students who receive financial education are better prepared to avoid debt, understand contracts, plan for the future, and seize opportunities for financial growth.

What lessons can Canadian employers and plan sponsors take from this? Whether in the classroom or the workplace, teaching basic financial concepts is critical to helping Canadians build the knowledge, skills and confidence they need to set, plan and achieve financial goals.

Why should employers care? We hope you’ll forgive us for repeating ourselves but financial stress is not an isolated incident. It impacts the bottom line in numerous ways: absenteeism, low productivity and delayed retirements among them. The Financial Consumer Agency of Canada estimates employee financial stress costs employers an average of $1,000 per employee per year. The good news is, one estimate that appears in several studies found that organizations saved $3 for every $1 that they invested in employee financial education programs. From new hire to retiree and all stages in between, helping your employees fill the gaps in their financial literacy, is a win-win.

Whether through group sessions or one-to-one coaching with an accredited financial wellness professional, providing employees with the information and confidence they need to make critical financial decisions helps them focus on the future, ease daily financial stress, and be more engaged in the workplace.

To learn more about Eckler’s financial wellness solutions, get in touch with us at https://www.eckler.ca/lets-talk/

GO with Eckler is a quarterly newsletter to help employers and plan sponsors support financial wellness for their employees and plan members. If you would like to learn more about how to support employee financial wellness at work, please contact your Eckler consultant.

To find out more, contact our financial wellness team.