Four Stages of Financial Literacy

Sharif Bhuiyan is an Analyst for Vancity Credit Union in Vancouver, BC. He is a former Intern at Social Enterprise Associates. His interests include microfinance, social enterprise and international development. In his spare time, Sharif enjoys traveling, sports and being the comic relief. Reach him directly at

Due to a record level of household debt in 2013 in North America, financial illiteracy raises epidemic concerns. Financial literacy is an individual's ability to make informed and effective decisions with their own financial resources (, 2013). In 2012, 42% of Americans and 50% of Canadian adults gave themselves a C, D, or an F in their knowledge of personal finance (Toronto Dominion, 2012; Bank of Montreal, 2013). In light of this deficiency, it is clear why households have saved less than 5% of their income (US Bureau of Economic Analysis, 2013; Statistics Canada, 2012).

This lack in savings combined with financial illiteracy, is one effort of household debt soaring to more than 140% of disposable income (Toronto Dominion, 2013). Younger generations of North Americans entering the work force face the risk of even higher debt levels due to increasing unemployment rates and student loans.

This blog entry shares my experiences with personal finance to encourage more financial literacy training, starting with children to young adults.

Stage 1: My Introduction to Financial Illiteracy
My experience with financial literacy began at the age of 10 with a first gift allowance of US$30. That day represented my first step towards financial freedom. I felt my parents recognized me as trustworthy and responsible; old enough to manage money. I was naïve. In just three days, I had spent the money on happy meals, gumballs and my favorite teenage mutant turtle action figure.

I remember coming back to my parents with tears in my eyes. I thought I broke their trust. Instead of the anticipated lecture, my dad just smiled. This was my first financial literacy lesson; save a portion of your allowance.

Stage II: Aware, but Financially Irresponsible
Fast forward eight years: I have just entered the University of British Columbia. My first part time job was in security - I made minimum wage. I opened a bank account and put in US$350. I received my first credit card happily provided by the bank's financial advisor. I remembered my dad's lesson on savings and as I worked my way through university. And, I made some big purchases using my credit card to ‘pay later'. By the end of that year, my credit card debt was double my annual earnings. I dutifully made the minimum payments ($10/month). With a 19% interest rate, my debt rapidly increased. It looked like there was no way out of this situation. I again turned to my dad for support and advice. He provided my second lesson on financial literacy; don't spend more than you earn.

Stage III: Overcoming Financial Illiteracy
Eight years after, I was working in my first job - with Vancity Credit Union in Vancouver, BC, Canada. By this point, I counted 16 years handling my personal finances. My dad's numerous lessons had guided me to overcoming financially illiteracy. I have learned that financial management is full of perils which can negatively affect an individual's happiness in life and economic well being.

Financial literacy is best taught at a young age. With a continuously developing brain and a natural curiosity, Generation Z (those now aged 1-13 years old) can rapidly learn valuable concepts around debt, savings and wealth creation. Without basic financial concepts, people are more susceptible to bankruptcy, carrying debt loads, scams and higher financial costs.

Stage IV: Teaching Financial Literacy to Others
Based on this understanding, I trained to become a certified financial literacy trainer with Vancity's Each One Teach One Program (EOTO). This program has volunteers sharing basic financial concepts with people from vulnerable communities. Each presentation covers topics from introduction to banking to identity theft to what to do about fraud. The presentations I have done to date have been met by participants with appreciation, happiness and relief. While the EOTO participants are from different backgrounds, they all shared common stories of financial hardship.

A unifying sense shared among the younger participants was confusion in their lack of financial knowledge. Gaining the tools to overcome this ignorance through these financial lessons bestowed EOTO participants more confidence in handling their own personal finance and the affairs of their families. Not only was I delighted to be helping others, I learned another important lesson. Financial literacy is not only about the freedom to act, but also about the empowerment through confidence to understand and control one's own situation.

Based on my personal experience, financial literacy is best learned at an early age. Parents are encouraged to actively develop their children's knowledge of personal finance. The best way is through meaningful shared activities like teaching saving during the holiday shopping season and using a family ‘piggy' bank. There are many online resources and saving tools for parents. One example is America Saves which includes an online pledge. In exchange for children saving $5 a month, they can earn special benefits. While saving $5 seems small, just having a monthly plan goes a long way towards successfully financing college tuition or affording a car. More importantly, all lessons about personal finance young stay with a child to use throughout life. With the Holidays around the corner, perhaps the best gift to give is a lesson on financial literacy.

Awesome Websites to Check Out!

Financial Educator Council:

Practical Money Skills:


Find Us Online



Coming Events

Native Learning Center Webinar: Strategic Planning for Housing

Invest Local

We help businesses and nonprofits to access the capital they need to grow.

See our Resources Guide, and visit our Page.


See how entrepreneurs and communities are leveraging the power of the marketplace for betterment. Get inspired & get to work!

Bookmark and Share



Using the power of business to solve social
and environmental problems.