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Upside to the downturn: Consumers have gained financial savvy

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Here's a bit of upside to the impact of the 2008 financial meltdown: lessons learned by average consumers.

A survey just released by Bank of Montreal finds that half of Canadians polled say their financial savvy has gone up since the downturn 4 years ago.

The crisis appears to have helped focus people's minds on the importance of a better understanding of one's investments.

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A majority of those polled give themselves a passing grade in financial literacy., with almost three-quarters (74 per cent) giving themselves a B or C on their level of financial knowledge, according to the bank's second annual BMO Financial Literacy Report Card.

Only one in 10 (10 per cent) award themselves an A, and 3 per cent say they deserve a failing grade.

Those polled say they are feeling more confident in their familiarity with various financial terms compared with last year:

  • 79 per cent say they feel knowledgeable about Registered Retirement Savings Plans (RRSPs), up from 69 per cent.
  • 72 per cent say they are comfortable with Tax Free Savings Accounts (TSFA), up from 64 per cent.
  • 62 per cent express confidence about Guaranteed Investment Certificates (GIC), up from 60 per cent.

Answers to a test to determine degree of financial literacy revealed that over half of those under 30 answered more than half of the questions incorrectly.

And nine in ten (87 per cent) of young Canadians polled indicate they would benefit from an introductory course on personal finance, according to the results by polling firm Pollara.

"While it's encouraging to see that Canadians are feeling more confident in their understanding of personal finance, there continues to be room for improvement, particularly among younger Canadians," Gary Rabbior, president of the Canadian Foundation for Economic Education, said in a news release Friday.

The survey results were compiled from a random sample of 1,000 Canadians 18 years of age and over between Oct. 25 and Oct. 29. A sample of this size would yield results accurate to plus or minus 3.1 per cent, 19 times out of 20.

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About the Author
Quebec Business Correspondent

Bertrand has been covering Quebec business and finance since 2000. Before joining The Globe and Mail in 2000, he was the Toronto-based national business correspondent for Southam News. He has a B.A. from McGill University and a Bachelor of Applied Arts from Ryerson. More

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