Literally learning debt management means having financial literacy. It involved acquiring knowledge about budgeting, saving, and investing to make informed financial decisions.
Principles of Financial Literacy
There are five known principles of financial literacy.
- Saving & Investing
- Borrowing & Debt Management
- Spending & Planning
- Protecting the Assets
- Your children must learn to live a happy, balanced life within their income without excessive debt.
- They must learn how to manage their workplace benefits.
2. Saving & Investing:
- Monitor where your money goes every month.
- Cut unnecessary expenses.
- Save some money every month to cope with emergencies and enjoy your vacations.
- If you have some excess money, save them into retirement, insurance, annuity, or mutual funds for future planning.
3. Borrowing & Debt Management:
- Weight significant loans against your overall income.
- Compare interest rates of loans.
- Keep debt within a limit so you can repay it without additional stress.
- Pay your installments of loans thoroughly and regularly.
- Monitor your credit score frequently.
4. Spending & Planning:
- Don’t forget to do your best bargaining in shopping.
- Plan purchases according to your income and needs.
- Try to pay with cash instead using credit cards.
- Create an emergency fund to bear the payment of your regular expenses for three or six months if your income stops.
- Determine what you should include in the emergency with your spouse and children.
- To protect your assets, buy life insurance, Med claim, vehicle insurance, and property insurance.
Benefits of Financial Literacy
Financial literacy in Canadian youths can play a vital role in shaping their financial path. There are multiple benefits of financial literacy, such as:
1. Building Good Financial Habits:
Financial literacy brings habits of living within your means. There is no overspending; have some savings for emergencies and the future, including retirement. It also makes debt management easy and stress-free.
2. Eliminating Debt Traps:
Payday loans, Pawnshop loans, and other loans with high-interest rates are kind of traps to spoil your debt management plans. Canadian youths can draw low-interest education and other loans to live a better lifestyle without indulging in a debt trap. Financial literacy helps to eliminate debt traps.
3. Better Financial Health:
Financial literacy at an early age saves Canadian youths a default on their debts and builds a better credit score than their peers in school or college life. They are less likely to be late on the monthly payments when they begin earning.
4. Better Career Planning:
Financial literacy at an early age fosters some essential economic senses in Canadian youths. For instance, they choose career options wisely, leading them to decent savings for retirement and investment to grow their kids and property.
Tips to Bring Financial Literacy Among Youths in Calgary, Edmonton, Lloydminster, & Alberta
Credit720 is a leading financial agency committed to spreading financial literacy among youths in Calgary, Edmonton, Lloydminster, & Alberta. The counselors in the agency suggested some excellent tips.
1. Show What You Are Doing:
Parents or guardians in Canada must explain to their kids right from the beginning what they are doing to manage their finances personally. Involve them actively in shopping, paying bills, withdrawing loans, paying installments, and other finance-related deeds. They will quickly absorb good financial habits.
2. Have Children Earn Money with Chores:
Instead of furnishing your children with direct pocket money, you can set rewards for completing some chores. It will teach them a sense of connection between earning and spending in life.
3. Discuss Career:
Don’t let career choices on children alone, or you make decisions on their behalf. Start a discussion on career aspects, keeping their preferences in mind. Explain the pros and cons of selecting a career path and let them decide at the end.
4. Teach Them Fundamentals:
Teach them the principles of financial literacy listed here at an early age and foster good financial habits right from the beginning. It will ease your financial management later.
5. Debt Management:
Teaching children debt management alone might help much. They also need direct help from expert financial counselors, and Credit720 is providing that help exclusively for Canadian youths in Calgary, Edmonton, Lloydminster, & Alberta.
Financial Debt Help in Alberta
There are some tips when you look for financial debt help in Alberta, Canada.
- Contact your creditors.
- Use debt consolidation services by Credit720.
- Look for free debt counseling from Credit720.
- Look into debt repayment programs.
- Think of debt settlement options.
- Explore consumer proposal options.
- Declare bankruptcy.
Bad Credit Help in Alberta
If you are dealing with bad credit scores in Alberta, Credit720 provides the following tips.
- Review your credit report.
- Pay down balances.
- Become an authorized user of credit cards.
- Apply for a secure credit card if you are a dependent child.
- Limit new credit applications.
- Negotiate with creditors.
- Use credit builder loans.
- Check the provincial program for you.
If you are responsible parents in Canada, foster financial literacy among your children right from an early age. Teach them financial literacy lessons and become their role model. If you think your credit score matters more in your financial life, contact the Credit720 team for free advice.