Financial Literacy Lifelong Learning Centre Wednesdays, October 3 to 24, :00 to 9:00 p.m. Gallery Room 106 Dr. Cyril Kesten Education 334, Faculty of Education

Financial Literacy This four part series will introduce you to the basic ideas of personal financial management. Sessions include: Financial Literacy: What is it?, Debt, Saving and Investing, Financial Alphabet Soup – TFSA, RRSP, RESP, ETF and more; and Using the Internet for Financial Management

Financial Literacy Financial literacy is the set of skills and knowledge that allow you to understand:  The financial principles you need to know to make informed financial decisions, and  The financial products that impact your financial well- being. financial-literacy.aspx

Financial Literacy The ability to effectively evaluate and manage one’s finances in order to make prudent decisions toward reaching life’s goals The understanding of: - Money - Cash flow - Basic economic/financial concepts - Debt/risk management

Achieving Financial Literacy Five Key Areas of Personal Finance:  Money and income  Money management  Spending and debt  Savings and investments  Risk management

Financial Literacy Means having the knowledge, skills and confidence to make responsible financial decisions Task Force on Financial Literacy, Feb 2010

Are Canadians Financially Literate? 25% of Canadians feel they are weak in: Keeping track of their finances Planning ahead Staying informed about financial matters Making ends meet 70% of Canadians say they are preparing their finances for retirement but a majority can’t describe their plans nor do they feel they will have sufficient resources to live they way they would like to when they retire 65% of Canadians did not know that their investments in the stock market are not insured 57$% of Canadians are not aware of what a credit report reports and a much larger percentage have never seen their own credit report. Only 51% of Canadians report that they have a household budget

People who are more financially literate Plan more Have more household wealth Display responsible financial behaviour

Financially Illiterate Unable to understand or process economic information Don’t understand compounding Can’t figure out fees Fail to comprehend diversification

Pension shortfalls taking a bite out of university operating budgets: Facing staggering pension plan deficits, some Canadian universities are struggling to continue funding plans and are resorting to desperate measures such as dipping into operating budgets and negotiating higher employee contribution rates. The University of Toronto's pension plan has posted a shortfall of nearly $1 billion, and Dalhousie University's pension deficit has risen to $270 million, leaving the plan less than 60% funded. An independent researcher says his analysis of 20 years of university spending data suggests that an increasing proportion of operating expenses are being diverted to pay for employee benefits. CAUT's assistant executive director of collective bargaining says universities have asked staff to help with pension deficits by accepting higher contribution levels and reduced benefits. Both institutions and unions need to get serious about reforming pension plans, says one pension critic. Possible solutions, he says, include raising the retirement age, not allowing retirees to collect full pension and come back to work, and basing calculations on average career salary instead of end-of-career salary. University World News | Add/Read Comments$270 millionUniversity World NewsAdd/Read Comments

Pension Plan Solution Defined Benefit Pension Plans Defined Contribution Pension Plans

What prevents good financial decision making? Procrastination, fear, indifference Maintaining the status quo Choice overload Overconfidence and/or optimism Impatience or “present-bias”

MONEY Why don’t you like to talk about money? Happiness is not in the mere possession of money; it lies in the joy of achievement, in the thrill of creative effort. You’re not rich until you have something money can’t buy Money is the root of all evil There are no pockets in a shroud. He would sell his soul for filthy lucre Money grubber If you make money your god, it will plague you like the devil. We live by the Golden Rule. Those who have the gold make the rules....existence has become an unreasoning, wild dance around the golden calf, a mad worship of God Mammon. In that dance and in that worship man has sacrificed all his finer qualities of the heart and soul - kindness and justice, honor and manhood, compassion and sympathy with his fellowman. ~Alexander Berkman

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