The Importance of Financial Literacy

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Did you know?

November is Financial Literacy Month in Canada. Financial literacy is defined as having the knowledge, skills and confidence to make responsible financial decisions at any stage of your life. The Canada Revenue Agency (CRA) recognizes the importance of providing Canadians with the information and skills they need to make informed financial decisions and is proud to support Financial Literacy Month with these tips.

Financial literacy tips

  • Do your research  Knowledge is power. Are you looking to buy a car? Opening a savings account, an RRSP, TFSA, or RESP? Signing up for a new credit card? No matter what you’re doing, it’s important to always be educated on the subject and aware of what options are in your best interest. Before making a major financial decision, make sure you ask questions, compare different options, read the fine print, and get a second opinion. Exploring all of your options is always less expensive than learning through experience.
  • Get access to credits and benefits you may be eligible for – Filing your taxes could mean more money in your pocket! Even if you don’t have an income, by filing your income tax and benefit return, you could join the millions of Canadians who automatically qualify for tax credits and benefits like the working income tax benefit (WITB). The WITB is a refundable tax credit that provides tax relief for eligible low-income, working individuals and families. In order to be eligible for the benefit, you must apply when you submit your income and tax benefit return during tax filing season. You may also be eligible for other benefits such as the Canada child benefit  and the GST/HST credit. Any extra money could go a long way to helping you support your family.
  • Keep accurate records – You can’t manage what you don’t know. One of the most important parts of financial planning is making sure you have all the information you need. By keeping accurate and up-to-date books, records and documents, you can confirm when you paid certain bills and track things like your income and expenses.  You should also make sure to get any work in writing, that way you always have a record of your expenses that you can refer to if any issues come up. When it comes to taxes, individuals and businesses should keep receipts and supporting documents for six years in case the CRA needs to see them again. If your books and records were lost or destroyed due to circumstances out of your control, contact the CRA.
  • Protect yourself from fraud  Don’t become a victim of fraud or tax scams. If you get a call or email that sounds like a scam, it probably is. Always be careful about providing confidential personal information, especially banking or credit card details, unless you’re certain the company or organization is legitimate. Make sure to never open, click or respond to links or messages from unfamiliar or suspicious sources. When it comes to taxes, the CRA has established procedures in place to make sure your personal information is protected by phone or email. The CRA will never:
    • Request prepaid credit cards or gift cards.
    • Ask for your information about your passport, health card, or driver’s license.
    • Leave personal information on your answering machine or voicemail or ask you to leave a message with your personal information.
    • Ask you to provide personal information by email.

If you have doubts about someone claiming that you owe the CRA money, you can call us or contact the CRA. It costs nothing to ask, and it might save you from losing your hard-earned money.

It’s never too late or too early to improve your financial understanding. It pays to be well informed!

If you would like more information on various programs, deductions and credits that can help you and your family, contact GB Pilley & Associates Ltd., Chartered Professional Accountants at 604 926 3522.

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