How to Improve Your Financial Literacy

• Identity protection
• Dedicated savings
• Budgeting

Sure, identity theft is a crime, but it can still have a detrimental impact on your finances, which is why taking steps to protect it is crucial. Here are a few steps you can start with:

• Don't give out your personal information
• Leave your important documents (like birth certificate, SIN, and passport) in a safe place
• Carry only your essential documents when you leave home
• Keep your PIN a secret

There are other steps you can take, and things you can do if you suspect fraud, that we're going to go over later in this article.

If you don't already have a savings account, then it's time that you get one.

It's important to have dedicated savings because it becomes easier to set financial goals. You can have separate accounts for different goals if you'd like, or you can opt to keep everything in one account with the amounts for your goals written down separately.

The main thing you'll be keeping in your first savings, though, is your emergency fund. From there, you can opt to make more goals, or you can open up separate accounts for retirement and the like.

There might be a few things you need before you walk into the bank, but what you need is going to depend on where you're opening your account. Typically, you'll need at least one form of ID along with an opening deposit and your Social Insurance Number (especially if you're opening an interest-bearing savings account).

Not all banks require an opening deposit for a savings account, though.

This is arguably the most important component, and that's because it's the literal basis of your entire spending plan. It's also one of the hardest components to cover.

It requires you to get real about your spending (the good, the bad, and how much you spend on takeaway), and then make changes according to the goals you're trying to reach. When you can analyze and keep track of your budget on a monthly basis, then you can start branching out into other sectors of personal finance, like investing and even credit building.

While we've already told you about a few of the most basic things you can do to prevent fraud, there is a lot more to learn about.

As you start keeping more money, opening more accounts, and investing in multiple places, it's going to be important to check in on those accounts regularly. Getting a quote from a professional who can track these things is helpful if you have the resources, but it's also simple to keep track of yourself with a bit of time, practice, and patience.

Buying proper insurance can also be a big help here. At a minimum, familiarize yourself with the steps to take when you suspect fraud and know the phone numbers of the banks and other businesses you work with to make the process easier.

The next best step to take is learning about your paycheque and how it's split up. The biggest thing that's going to be taken out of each of your paycheque are taxes. This is typically going to consist of:

• Income tax
• Canada Pension Plan contributions (if you're between the ages of 18 and 69, aren't disabled, aren't receiving CPP or QPP)
• Employment insurance premiums

What other things get taken out are going to depend on your personal situation. From there, you can work to split up your paycheque to fit your situation.

That's where creating a budget comes into play.

Your budget is going to contain categories for spending each month, and your goal is going to be keeping your spending under the numbers you've set for yourself (you won't always be perfect, though, and that's OK). Remember, the biggest goal of your budget is to track your spending, not judge it.

Typically, your budget will contain line items for things like your rent or mortgage, groceries, utilities and/or bills (and then subcategories for each payment you make), shopping, fun, savings, and debt repayment if you have any.

As you learn more about your budget, you may start setting financial goals for yourself. Maybe you want to spend less on take out so you have more for savings, or maybe you notice you can cut back on groceries each month to make space for paying off debt.

You can set goals for yourself from the very beginning, or you can track to see where you adjustments should be made within your budget.

Next, if you don't have credit, then it's time to start building. You can apply for a lot of credit cards, but one of the biggest things to remember is keeping your debt-to-equity ratio as low as you can.

Things can get out of hand fairly quickly if you're not careful, and negative blows to your credit can have lasting effects later down the line.

Books on personal finance are everywhere, and sometimes they're even free. If you're trying to save money, you can visit your local library to see what they have, or you can talk with friends and family. 

You might be surprised at what those collections have to hold for you.

Books on personal finance are everywhere, and sometimes they're even free. If you're trying to save money, you can visit your local library to see what they have, or you can talk with friends and family. 

You might be surprised at what those collections have to hold for you.

Whether you have children and you're in debt, you're a business owner learning to invest, or you've just become financially independent and you're learning to grow, there's a podcast out there somewhere for you.

Podcasts offer a range of topics and ideas to explore, and they're the perfect place to start your journey. Best of all, they're free and easy to access. You can turn one on when you're going for a walk or even driving to work.

While this route isn't always free, it's a great place to start. Taking a financial literacy course is going to help you actually put things into practice rather than just listening and thinking.

Assignments for these courses are often based on actions that you can take as you're learning, and they're meant to be used in and out of the learning environment. Like podcasts, there's a course for everyone no matter what financial situation you're currently in, and they can be taken online for easy access.

Not everyone is good at math, and numbers can get confusing and overwhelming pretty quickly, but they're also important when you're learning about financial literacy.

Like online courses and podcasts, finding resources to help improve your math skills is easy in this digital age. Hopping onto websites like YouTube is a great place to find easy videos that are great for learning about the topic.

Online searches can also help you find free templates and other resources to help you keep track of your spending. Whether you need a monthly budget, an income tracker, or even a place to plan your grocery lists, making use of free resources online is a great way to contribute to your overall financial literacy.

Eventually, you'll probably be able to create your own templates, but having ones premade for you can make learning (and improving upon) new math easier to do.

Things like tax laws, dates, and even stimulus payments are all subject to change without notice. It's important to keep up with government websites so you're aware of any changes that are made, and how they might affect your financial future.

To do this, you're going to need to start with tracking your current spending habits. You can do this by downloading an app and inputting all your data, or you can take the old-fashioned route and pull out your pen and paper.

You can start with previous bank statements for this, but if you just opened an account then you won't have access to that information. Instead, you can track your finances over a set number of weeks and then go from there.

Once you know how much you spend on things like groceries, bills, credit cards, food, and other expenses each month, you're going to write everything down and see where it fit with your budget. For the first few months, you might find it difficult, but there's no reason to beat yourself up over spending habits.

The point here is to learn, and that's what you're doing.