A national youth financial literacy survey, released to mark November as Financial Literacy Month, shows that high school graduates are highly optimistic about their financial futures. On average, students expect to earn over $70,000 in 10 years’ time (more than double the reported income of Canadian post-secondary graduates ten years their age) and almost three quarters expect to purchase a home within ten years, which is a much higher rate than actual home ownership. Over 90% of those surveyed were enrolled in post secondary courses.
“This is the first comprehensive Canadian benchmark study on youth financial life skills. We believe that the information and analysis in this study will help educators and policy makers develop and deliver financial literacy programs for Canadian youth,” said BCSC Chair, Brenda Leong.
The study surveyed the impact of financial literacy courses on high school graduates. Students who took comprehensive financial literacy courses and had good experiences taking them performed better overall on financial literacy outcomes (attitudes, behaviour and knowledge). The survey also showed that simply having taken a financial literacy course has little impact on these outcomes and having a bad course experience is the same as not having taken a course at all.
“This information points to the importance of how financial life skills are taught in our secondary schools. The study tells us that the more comprehensive a course is and the better taught, the more likely students will have higher scores on financial attitude, behaviour and knowledge,” said BCSC Chair, Brenda Leong.
The study included a financial literacy test. BC and Alberta performed higher than the national average. 42% of BC graduates scored an “A” or higher followed by Alberta graduates at 37%, above the national average of 35%. One explanation for this result is the fact that BC and Alberta both have comprehensive financial life skills courses in their high school curriculum.
On the important matter of student debt, the survey showed that over half of the respondents carry debt, which for nearly 70% includes a student loan.
And while half say they plan to pay it off in five years, the numbers tell a different story. Student debt has reached a record-high of nearly $15 billion, according to 2010-2011 actuarial report released by the federal government.
Concludes Ms. Leong, “The financial realities that we face as Canadians indicate that there is a lot at stake in educating young Canadians to be financially prudent. We need to build on the momentum created by the Taskforce on Financial Literacy and become global leaders in graduating students who are not only well versed in Languages and Mathematics, but in personal financial management as well.”