As Financial Literacy Month comes to a close, I just want to take a minute to make one thing absolutely clear: a lack of financial literacy is not why Canadians are struggling today.
Consumer debt and mortgage balances haven’t ballooned because people suddenly became less knowledgeable about their finances. No one thinks that maxing out their line of credit just to pay for groceries is a savvy financial move.
And what’s really happened is no mystery: inflation soared and interest rates skyrocketed, while incomes largely failed to keep up.
Look at any chart of home prices versus wages for the past few decades. Millennials aren’t struggling to buy homes because they don’t know how to save money.
They’re struggling because, by any historical measure, homes are wildly unaffordable.
The best way to help Canadians lower their debt burden isn’t to encourage them to “speak to their bank” or to “find resources from trustworthy sources,” which is what the government website encourages.
The solution is to make living in Canada more affordable.
Like, I’m all for better educating people about finances in school. I’m all for helping people learn more about how everything works so that they can make more informed decisions. A bunch of my time each week is specifically dedicated to helping people improve their financial literacy.
And I’m big on taking ownership regardless. No matter who or what is to blame, individuals have to figure out how to make the best of the circumstances they find themselves in.
But individual responsibility won’t solve the structural problems that are currently playing out in the Canadian economy.
That’s what the Canadian government should be squarely focused on.
Not trying to pretend like a lack of financial literacy is the real problem.
Because it’s not.