Giving currency to FinLit

Jane Rooney, Canada’s first financial literacy leader, is spreading the word on making smart money decisions.

A few months ago, Jane Rooney’s oldest son, Liam, got his first job — selling NHL products and memorabilia at the Canadian Tire Centre, home of the Ottawa Senators. It was a proud moment for Rooney, and not just because the budget-savvy mom now has her 17-year-old chipping in for gas, car insurance and post-secondary education savings. The milestone presented a great opportunity for Rooney, Canada’s first national financial literacy leader, to do what she does best: create a teachable moment. After opening Liam’s first bank account, Rooney sat and talked to him about all the benefits of direct deposit and pointed him to the Financial Consumer Agency of Canada’s (FCAC) website to read up on all those deductions he’d soon see on his paycheques. “He’s a great saver and spends wisely,” says Rooney, 48. “This is a great opportunity to teach him to save some, spend some and give some.”

The Ottawa-based consumer education specialist in the financial sector has the same level of passion for financial prudence when it comes to teaching the basics of personal finances not just to her son, but to all Canadians. That’s why in April Rooney accepted the grand and much-publicized position of financial literacy leader, a federally appointed role that’s not only a first in Canada, but also worldwide. Conceived as a result of the Task Force on Financial Literacy’s recommendation to the federal government to hire a dedicated financial guru who would “champion financial literacy on behalf of all Canadians,” Rooney’s mandate is to develop a national strategy for improving the financial literacy of people across the country by spring 2015; her overall performance will be put to the test with a nationwide financial literacy survey next year.

Her task is easier said than done. Piggy banks from coast to coast aren’t in great shape; the trend over the past few decades has shown Canadians are saving less and digging themselves deeper into debt. According to the 2009 Canadian Financial Capability Survey conducted by Statistics Canada, only 51% of Canadians have a budget; 31% are struggling to pay bills and make credit card payments each month; of those in the market to buy a house, 48% have saved less than 5% of the home’s cost; and 70% are fairly or very confident that their retirement income would allow them to keep their standard of living, but 60% don’t know how much money it would actually take for them to remain comfortable into old age.

What’s more, the task force’s findings in its 2010 report “Canadians and Their Money: Building a Brighter Financial Future” were equally worrisome: half of adult Canadians say they struggle with “simple tasks involving math and numbers.” It’s no wonder the average consumer debt per Canadian (now at more than $27,000) has broken all-time-high records. There’s also a lack of knowledge about how life events — such as marriage or divorce, starting post-secondary school, getting or losing a job, having kids and planning for the twilight years — affect finances. “Many Canadians are either unaware of the considerable amount of financial information readily available across the country, are unsure of its credibility, or simply do not understand it,” the task force reported.

Armed with a $5-million annual budget, Rooney has a mandate to get the country on the same page when it comes to making smart money decisions. It’s her mission to make a dent in the collective mess Canadians have made with their money — from dwindling retirement savings to a spending-more-than- earning culture and even a growing number of financial scams. “Canadians are having trouble living within their means, budgeting, planning for retirement and choosing products and services,” says Rooney. “There’s a lot of information out there. So why is it so difficult?”

Exploring and eliminating the reasons why so many people have money problems is something Rooney has dedicated her career to. With a degree in economics, she spent time at the Canadian Payments Association where, as a policy analyst, she worked on developing rules for pre-authorized debit purchases, fund transfers and the like. She stayed for seven-and-a-half years before taking a position in 2002 as a consumer education officer at the FCAC, where she moved up the ranks to become director of financial literacy and consumer education in 2008. “My job fit beautifully with helping Canadians on a topic I loved. I’m super passionate about helping people,” she says.

William Knight, the first commissioner of the FCAC, attests to this passion, and says Rooney was a “keeper since Day 1.” He saw her good instincts in policy and research firsthand. “We watched her and the financial literacy team build a first-class network to deliver the goods and enhance Canadians’ understanding of basic finances,” he says.

Rooney is drawing on her successes at the FCAC in her new role, which touches on themes she’s dealt with in prior posts, such as raising awareness and collaborating with various stake-holders. During her first seven months on the job, for example, Rooney has been working toward the launch of a comprehensive financial literacy tool on the FCAC’s website and encouraging organizations to help raise awareness by hosting workshops and activities for November’s Financial Literacy Month, including the FCAC’s financial literacy conference, credit education week and financial planning week. She’s also appointed a National Steering Committee on Financial Literacy, a panel of financial superstars that includes CTV News’ consumer fraud specialist Pat Foran and Cairine Wilson, CPA Canada’s vice- president, corporate citizenship, who will provide advice on strategies in the works.

“CPA Canada’s research, conducted over the past few years, has revealed that many Canadians have little room for error when it comes to their finances, and that scenario won’t be changing overnight,” says Wilson. “Rooney plays a vital role by collaborating with stakeholders and helping them contribute to and support initiatives that will truly make a difference in the lives of many Canadians. She is bringing various sectors together to help develop a national strategy aimed at making Canadians better money managers.”

Rooney’s ability to be inclusive is a big part of what will make her succeed, says Knight. “She can get everyone in a room and be sensitive to the range of stakeholders she’s working with,” he says. “She has a good sense of humour, passion and knows financial literacy like an accountant knows a balance sheet.”

To achieve her mandate, Rooney has developed a three-phase plan, the first of which will focus on seniors. The 65-plus demographic is not only the fastest-growing group to declare bankruptcy in Canada, but in 20 years seniors will account for almost one-quarter of the country’s total population. “These people need to be planning ahead for retirement, protecting themselves against fraud and understanding the government benefits that are available to them,” she says. For example, only a quarter of eligible Canadians contributed to RRSPs in 2011. And an alarming number of seniors don’t know the difference between the Canada Pension Plan, Old Age Security and the Guaranteed Income Supplement. Rooney is also concerned about the frequency of financial abuse against seniors, who are increasingly victimized by loved ones and caregivers.

Phase two of Rooney’s plan will aim to identify the challenges of priority groups — low-income Canadians, newcomers to the country, Aboriginal Peoples and people with disabilities — and the best way to reach out and help those groups, while phase three will target young adults and youth. “We need to get kids before they make costly mistakes,” she says. Financial literacy is being taught in Grades 4 to 12 in Ontario, in kindergarten to Grade 12 in Manitoba and is a mandatory component of a high-school course on career planning in BC, for example. (CPAs across the country can share their expertise in the classroom through CPA Canada’s volunteer Community Connect program; see “How you can help,” below, for more information.) Parents can also play a role, says Rooney. “Whether it’s linking a weekly allowance to chores, setting goals or rewards for savings or just setting a good example with your own behaviour, there are many steps parents can take to teach basic money smarts and good financial habits from a young age.”

Besides implementing best practices across Canada, Rooney is making it a priority to know what’s working in other countries. As a board member on the International Financial Education Network, Rooney has the opportunity to meet with financial literacy strategists in 107 countries, including Australia, New Zealand, the US and the Netherlands. One of the most significant things she has learned is ways to engage the most vulnerable populations in rural areas. “There are fascinating ways people across Africa are being taught about money through plays. There can be great teachable moments through entertainment,” she says. Indeed, while at the FCAC one of the most highly acclaimed programs Rooney implemented was The City: A Financial Life Skills Resource, an online financial skills simulation game developed for high-school students as a fun, interactive way to teach them about money. (The game was awarded the Public Service Award of Excellence in 2010.)

While few people fully doubt the success of teaching financial literacy, some don’t buy education as the be-all and end-all way to turn the country’s dire economic situation around. The naysayers say altering behaviour is the key to putting more money in Canadians’ wallets. “Gaining skills and confidence makes people change their behaviours toward money,” says Rooney. More specifics on how to achieve that change are to come within the next several months and, while change takes time, Rooney is hopeful she will achieve her mandate.

“In the coming years, two major changes I would like to see are lower consumer debt levels, or at least managing debt wisely, and higher long-term savings rates. Beyond that, I hope to see Canadians stand among the most financially literate nations,” she says. “Canada is already a leader in terms of its financial institutions and the support we have built for financial literacy initiatives. We will soon see that translate into real improvements in the financial decisions Canadians make.”

HOW YOU CAN HELP

As finance experts, CPAs are well-positioned to boost Canadians’ money smarts by counselling small businesses, sole proprietors and individuals. But beyond the day-to-day work with clients and colleagues, professional accountants can play a larger educational role in the community, says financial literacy leader Jane Rooney. “CPA Canada’s website dedicated to financial literacy and the community outreach programs are excellent examples of the collaborative, community-based approach we need to reach Canadians from diverse backgrounds and walks of life,” she says. Volunteers who sign up for CPA Canada’s Community Connect program are able to share their knowledge by hosting sessions on topics such as getting ready for retirement and teaching kids the basics about money. Go to cpacanada.ca/financialliteracy.