This is a diagnostic writing exercise assignment based on a ‘money issue’ topic. The topic is ‘making sense of money,’ and authored by Peter Nares. In this paper a summary of the article is given after which the views will be critiqued. The article is based on Canada and analyses the financial situation in reference to the financial discipline among the Canadians.
Nares (2009) describes financial literacy as the ability to manage money, getting financial advice when required and making of informed financial decisions. He argues that anecdotal evidence reveals the Canadians as financial illiterate to a high level and as such poses a growing challenge for the government and consumers of financial services who wish to see the see the citizens prosper. The author believes that financial illiteracy contributed much to the global financial meltdown. The author writes down some basic facts which support the need for the generation of a better understanding of the significance of financial literacy. It is important, according to Nares (2009), that the fight against financial illiteracy goes beyond distribution of brochures (Nares 10).
Though the capacity to manage savings and credit is key to self sufficiency Nares (2009) argues that navigating with right information is often the challenge especially for the cases of those who are not able to afford financial advisors. This situation is made worse by the presence of varieties of products in the market. Nares (2009) continues to argue that financial illiteracy can lead one to a devastating situation whereby one is not able to live as expected and gives an example of the absence of an emergence fund which can likely lead to the compromise of the family future (Nares 10).
The author associated financial illiteracy with the likelihood of poor performance of workers. He however goes further to warn that financial literacy will not automatically solve all the problems but is rather a backbone to solving financial challenges. The author introduces SEDI, a firm engaged in the financial literacy research and capacity building. In the introduction, the firm is depicted as a national firm operating across Canada. He goes further suggest a solution, “there are two critical components to growing financial literacy in Canada” (Nores 11). These two are listed as:
- enabled policy environment and
- increased supply of and demand for financial literacy services
In connection to the above solution suggestions, SEDI called for the development of financial literacy strategy for Canada. The Canadian Centre for Financial Literacy was launched to make a contribution to the supply of and demand for literacy challenges. The centre has targeted vulnerable groups such as the youths to boost their financial literacy. The centre operates through three main areas: capacity building, research and information sharing and consulting. The author also writes about testimonies of people who have gone through the center and have been surprised by the discoveries they made pertaining to their expenditure (Nares 12).
The article carries an excellent analysis of the situation in Canada with respect to financial discipline among individuals. It is quite relevant to the current situation bearing it was just authored last year. SEDI has offered plausible suggestions through its centre. However it could be more effective if the suggestion aimed at the introduction of financial literacy classes in the formal education curriculum. In this manner the children will grow up with high levels of financial literacy acquired from the schools. This will ensure that the future Canadians protected.
The article was expected briefly discuss the role of entrepreneurship in alleviating financial challenges. Wise investment is another mean through which one can make sense of money. The article is good and the author has good knowledge on the topic as the article is written authoritatively.