Financial Literacy

What do you know about Financial Literacy?

Did that question just make your body completely freeze up? It is completely normal if it did. 

Overall what Financial Literacy is having the knowledge, skills, and understanding of various financial concepts and practices that enable you to make informed and effective decisions regarding your Financial Sobriety. 

Understanding budgeting (aka Spending Plan), Bank Accounts, Investments, Debt etc. When I say this I don't mean that you need to teach Financial Literacy 101, just having some insight of the basics to empower you to connect with your money. 

Here are some questions to get you to start understanding what accounts you have: 

Bank accounts - How much do you pay per month for your account? How many transactions are included in your monthly fee? Is there a daily balance that you can have that will waive your monthly fee? What expenses automatically come in and out of your account every month? 

Savings Accounts - What is the interest rate you get paid on your savings account? Do you have any fee's attached to your savings account? What is the purpose of your savings account? Could you be earning more interest?

Credit Cards - How much is your annual fee? What is the interest rate on your credit card? Do you have any rewards that you earn with your credit card? Do you have any insurances that are included on your card (example travel insurance, purchase insurance etc.)? 

Line of Credit - What is the interest rate on your line of credit? Is your Line of Credit a HELOC? (HELOC is a line of credit that is secured by your home). How much is your minimum payment every month? Is the minimum payment you pay every month just paying your interest? 

Mortgage - What is the interest rate on your mortgage? How much longer will that interest rate be in place (this refers to the term on your mortgage)? How much longer do you have until your mortgage is paid off (this is called the amortization of your mortgage)? Can you prepay onto your mortgage without penalty? Do you have insurance on your mortgage for life, critical illness or disability? 

Investments - Where are your investments located (what company, bank or within an employer account) What kind of investments do you have (retirement, non registered (not receiving taxable benefits), mututal funds, stocks, GIC's/CD's? Do you have an advisor that is assigned to your investments to ensure you are in the right investments (this is usually found on one of your statements)? 

These are questions you can ask the place where the account is held, they are there to help you. 

I know that when I say that you can ask these questions to the bank or institution your accounts are held at and you probably are thinking....um heck to the no. I get it. 

When I worked as a Financial Advisor I would have people come into my office DAILY who were absolutely PETRIFIED to come in to my office, let alone ask me any questions. 

There is so much shame we feel because we won't understand our money and there is too much fear to ask the questions. 

What if you did it even if you felt the fear? How good would it feel when you actually had the information!? 

You are NOT alone in feeling shame because you don't understand your money. That is exactly why Financial Sobriety School is here! 

I go into more detail with some specifics of financial literacy on the podcast or if you want to watch it, it's also available on our YouTube Channel. Here are the links: 

Spotify: 

https://open.spotify.com/episode/4wYNZXQSFWNneSPihOm6ag?si=2f94d16135e74b2e

Apple Podcasts:

https://podcasts.apple.com/ca/podcast/your-money-your-recovery/id1493570547?i=1000617684507

YouTube: 

https://www.youtube.com/watch?v=jsP-3nHrKaE

So excited to dive into empowering yourself with knowledge about your money, AND honouring you when it feels hard. 

All the money love sent your way, 

Linda Parmar
Financial Sobriety Expert