Knowledge is profitable

It’s been stated many different ways throughout history that knowledge is power.

That is true with respect to finance today.

What’s more, information is not just a powerful tool to navigating money matters: knowledge can be profitable.

Well-informed consumers are often the most financially healthy or, at least, they’re less stressed.

Many reports and surveys released for Financial Literacy month (November) suggest Canadians across many age groups are feeling financial anxieties.

Canada Pension Plan (CPP) Investments published its 2026 Retirement Longevity Index, and Canadians scored 44 out of 100 on their confidence in the longevity of their retirement savings.

Similarly, we don’t rate well on taking steps to deal with that potential outcome, it found.

One reason for the findings is general financial anxiety, says Frank Switzer, managing director of communications at CPP Investments in Toronto. “The main reason (for that anxiety) is financial pressure.”

For many Canadians who aren’t retired, retirement is not the fire in their lives creating the most heat and potential destruction.

Switzer points to younger Canadians having other pressing money priorities. “They are juggling retirement against major life milestones (like home ownership and post-secondary education), while for older Canadians, the competing pressures are more likely to be income and debt.”

Debt is a fairly widespread problem, though it increases in middle age.

One recent report from Loanscanada.ca, using Equifax and Statistics Canada data, shows on average Canadians owe more than $22,000 in non-mortgage debt.

At the low end is the 18 to 25 age group with about $8,600 in debt. The high end is ages 46 to 55 with nearly $35,000.

When mortgages are added into the mix, millennials are grappling with the highest levels at $287,200 for ages 35 to 44, trailed by ages 45 to 54 (Generation Xers) at $273,000.

Among all age groups, mortgage debt remains the biggest sore spot.

Financial management can be another problem, according to a recent study by the U.S.-based fintech Wise, which offers low-fee international currency services, and increasingly low-cost online banking services in Canada.

It found 45 per cent of those surveyed indicate managing their money has become more complicated. One reason may be another finding of the study: many, especially younger adults, have multiple financial accounts.

“It’s a lot easier for Gen Zs to sign up for apps without cumbersome bureaucracy like in the past,” says Ankita D’Mello, principal product manager with Wise, based in Austin, Texas.

“The challenge is that they have really got to understand what they’re signing up for, and this is really where financial literacy becomes important.”

A recent BNN/Bloomberg report cites Gen Zs are the fastest group of credit-active consumers, even compared with millennials at the same stage in life. They also have the highest delinquency rates.

They also are more likely to be victims of payment fraud with nearly half experiencing a fraud attempt or lost money due to a scam in the last 12 months, another recent report by Payments Canda found.

Certainly, financial literacy steels young adults for the dog-eat-dog world of money.

Parents, too, play a role by helping children arm themselves with good knowledge to avoid early money troubles that can set them up for worse ones later on, says Joe Moghaizel, vice-president of everyday advice journey at TD in Toronto.

“At the end of the day, parents don’t need to have all the answers, but they need to start bringing kids into the basic decisions that they’re making daily.”

He points to a TD survey for Financial Literacy Month that shows children are eager to learn about money. “Kids are interested and demonstrating positive behaviours around money, but their confidence isn’t keeping up.”

The survey found among youth surveyed in Manitoba and Saskatchewan, 67 per cent feel confident with money versus 72 per cent nationally. It also found boys are generally more confident about money.

Confidence is both a blessing and a curse for money management. Too little leads to people avoiding dealing with money matters; too much confidence leads to making decisions based on incomplete knowledge — also setting the table for financial failure.

Financial literacy should be viewed as a journey, Moghaizel says. “We are just encouraging parents and young Canadians to start their (financial literacy) journey as early as possible.”

He points to another survey finding: many young Canadians still value face-to-face help.

Working with a regulated, licensed financial adviser can help make the financial journey less bumpy. As the CPP study alludes to, the journey is likely to be long.

“The overall story we found in doing this survey is that Canadians are living longer and that means retirement can last longer than expected,” Switzer says, underscoring CPP will be a foundation of a long retirement.

Today, CPP is designed to provide a quarter of retirees’ income. By the time today’s youth are retiring, increases to CPP contributions will provide a third of retirement income.

That’s one less worry, given “young people are concerned about other things right now.”

Switzer adds the pension plan is forecast to be able to meet its obligations for the next 75 years, which is the longest period the Office of the Chief Actuary can look into the future.

In the meantime, every Canadian — old and young — is best to consider financial literacy essential to secure their today and many tomorrows to come.

In other words, embrace lifelong learning about money rather than considering it homework to procrastinate doing as long as possible.

After all, knowledge can be profitable.

Joel Schlesinger is a Winnipeg-based freelance journalist

joelschles@gmail.com