Household debt is affecting the lives of Canadians every day and is one of the primary focuses of the Bank of Canada and the federal government. After analysing the issue and considering Canada’s past regarding household debt, recommendations for improving the financial position of Canadian households are outlined below.
Promoting Education in Financial Literacy
There is a strong correlation between the lack of financial literacy and household debt in Canada. People who are more educated regarding financial knowledge would be able to handle their finances more effectively and reduce their household debt (The Globe and Mail, 2015). Promoting this kind of education can lead to individuals perceiving themselves as capable financial managers as well as have a basic sense of financial literacy – no matter the person’s level of income or debt (StatsCan, 2015). Individuals who are more financially educated are also more likely to seek financial advice on a variety of matters, such as meeting with and speaking to a credit counsellor (StatsCan, 2015). An example can be offering knowledge of financial nature in secondary or …show more content…
The reason is because financial literacy was found to be valued and have a strong association with the causes for Canadian citizens’ household debt (StatsCan, 2015). Also, the majority of household debt in Canada is consisted of mortgages, not consumer debt (Financial Post, 2016). Therefore, advice on Canadian citizens’ mortgage issues was mainly focused on rather than their consumer spending. Finally, other alternatives such as increasing interest rates as well as down payments in Canada would cause disruptive implications within the nation’s economy (CBC News, 2015), so the two possible options given were the ones that was the center of concentration for recommendations on household debt in
Promoting Education in Financial Literacy
There is a strong correlation between the lack of financial literacy and household debt in Canada. People who are more educated regarding financial knowledge would be able to handle their finances more effectively and reduce their household debt (The Globe and Mail, 2015). Promoting this kind of education can lead to individuals perceiving themselves as capable financial managers as well as have a basic sense of financial literacy – no matter the person’s level of income or debt (StatsCan, 2015). Individuals who are more financially educated are also more likely to seek financial advice on a variety of matters, such as meeting with and speaking to a credit counsellor (StatsCan, 2015). An example can be offering knowledge of financial nature in secondary or …show more content…
The reason is because financial literacy was found to be valued and have a strong association with the causes for Canadian citizens’ household debt (StatsCan, 2015). Also, the majority of household debt in Canada is consisted of mortgages, not consumer debt (Financial Post, 2016). Therefore, advice on Canadian citizens’ mortgage issues was mainly focused on rather than their consumer spending. Finally, other alternatives such as increasing interest rates as well as down payments in Canada would cause disruptive implications within the nation’s economy (CBC News, 2015), so the two possible options given were the ones that was the center of concentration for recommendations on household debt in