4 Habitual Methods for Women to Improve Their Financial Literacy

Financial independence is like a Russian nesting doll: it’s one big idea with a progressively smaller, easier-to-handle littler idea inside.

So, the core of financial independence is financial literacy. You’re not going to get far in this field if you don’t understand it.

Weirdly, literacy is where 60% of Canadians get stuck. They see that word and get so discouraged they don’t bother to pop it open and see the simple idea that makes literacy work.

Because at the core of literacy is lifestyle. As my French teacher used to say, the quickest way to become fluent in a new language is to hear it every day. And trust me, changing your lifestyle is definitely easier than having to conjugate verbs in plus-que-parfait.

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A lifestyle isn’t much more than a loop of habits. And habits, per psychology professor Ber Verplankan, are the product of a three-step process:

  • A cue in the environment, like time or location, triggers an action
  • The action is rewarded, and the brain associates that cue with positive outcomes
  • This makes the body compelled to repeat the action when it recognizes the cue again

The key to this process is that it’s entirely automatic. Humans are good at rationalizing: given the chance, we can talk ourselves into or out of anything. By building a routine into your subconscious, it turns into a habit: something you do without thinking.

In this article, we’ll be looking at a few simple tips to becoming financially literate, and how you can use easy psychology to work them into your day-to-day life.

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1) 3 times to inject 3 sources into your day

The most daunting thing about the finance industry is the sheer amount of knowledge needed to even begin to understand the space.

That’s why you should break it down. When faced with a mountain of work, your brain’s unlikely to see a reward. This increases the likelihood that you’ll start making reasons why you don’t have the time to watch an hour of Ted Talks.

Simplify the learning. Then pair it with something you already do.

Having breakfast in the morning? Half Banked reads like a casual chat with your neighbor about money management. Ever wondered how to save $100 by going vegetarian for a month? Personally, I’m too fond of morning bacon, but for those with more self-control, it’ll be an interesting read while you crunch on your cereal.

In the washroom? Brush up on your retirement knowledge with Retire Happy while you brush your teeth. I find that showering, as the only time when I’m completely cut off from the internet, is an excellent opportunity to mull over the pros and cons of taking the CPP early.

Want to read a 400-page bestseller? Just read five pages a day. If it’s written well or you’re more confident, maybe a chapter an evening. Match it with a drink: a cup of tea or glass of wine to sip in the evening while you flick through Cashflow Quadrant.

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Psychologist and author Dr. David Cohen explains that taking a bigger task and breaking it into smaller ones is something the brain inherently prefers.

A to-do list of simple tasks sticks out more in the memory because of the so-called “Zeigarnik effect”: people are more likely to consciously remember what they’re going to do than what they’ve already done.

By adding one thing to a daily routine of to-do’s, you’re much more likely to accomplish it. Anthropologists Ruth Barley and Caroline Bath’s research indicates that even from a young age, familiarization is important for comfort.

By tying one concept to another (like breakfast and reading), it’ll be a much more seamless transition than having to try and schedule a completely new task into your to-do list.

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2) Have and be a role model to motivate yourself via feedback loop

4/10 Canadian women said they know “very little” about finance and investment. Bit worrisome, but the problem only becomes clear when 4/10 then say they’re uncomfortable negotiating a better interest rate.

The unfamiliarity with money manifests as a lack of confidence in exploring the field. Because of their discomfort, they then don’t want to learn about money. Which came first, chicken or the egg.

The lucky thing is that a negative feedback loop is pretty easy to turn into a positive one. As we discussed in the section before, new habits are easier to form when attached to old ones. The feedback loop is already in place; we just need to tweak a valve to get it going in the other direction. The main valve we’ll be touching is confidence.

So how do you gain confidence? By finding a role model who shows you it can be done, and then by you showing that you can do it to someone else.

Most people are, whether they know it or not, already a role model to someone else. Be it positive or negative, we’re naturally geared towards seeing how others live and then modelling our own life based on their examples. This is because of vicarious reinforcement.

Popularized by Stanford professor of psychology Albert Bandura, vicarious reinforcement is the concept that we are more likely to emulate the behavior of those who we see as being rewarded. This reward can take any form: financial wealth, material goods, social clout, etc. The important thing is that we aspire to be like those who we perceive as receiving rewards that appeal to us.

If you’re looking for a role model specifically within the world of finance, then I can suggest Jessica Moorhouse, who went from broke filmmaker to certified financial expert. Or you could read about Nathalie Ouelett, who retired at 55 with $600,000 to live out the rest of her life in comfort. Or you could just pick up the phone and talk to any family or friends you admire for their financial resourcefulness.

The main thing is to understand that it can be done, and that anyone can do it. Now, the next trick is to prove you can do it to others.

It might seem like becoming someone’s financial mentor isn’t likely to help you yourself improve, especially if you’re a bit unsure of the topic, but there’s well-documented psychology surrounding these principles.

Gus Cooney, social psychologist at Harvard, reported that vicarious reinforcement was a two-way street. Much as rewards or punishment is likely to promote or discourage certain behavior patterns, so too can emotional triggers. Admiration is a big one: the social appreciation of others is a powerful motivator for certain modes of behavior.

The emotional encouragement from teaching others is known as the Protege Effect. Seeing learners put their knowledge into practice increased the teacher’s confidence, both in themself and in the knowledge they were espousing.

Thus, we have the other arm of our feedback loop. By learning and teaching, you can improve your personal growth and self-worth. A protege doesn’t have to be your student; it can be anyone who you feel you can give any kind of guidance. Some simple examples are:

  • Teaching children the concept of budgeting with pocket money or paid chores
  • Advising friends on restaurants or shops where you know they can get a great deal
  • Helping older parents or grandparents with digital finance tools or platforms they might not be well-versed in
  • Informing coworkers of how to complete their tax returns

Roman philosopher Seneca the Younger said docendo discimus: while we teach, we learn. There’s a stimulating reward in being a student as well as a mentor. This type of emotional loop can quickly become habitual, and all you have to do is help people you already like.

It’s what some call nachas: a Yiddish word meaning “Pride or gratification derived from someone else’s accomplishment.

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3) Use social connections to make a chain of proactive accountability

The idea of building habits off social connections isn’t restricted to the teaching-learning cycle. A great way to reinforce an activity into a habit is by having others remind you to complete them. Or, better yet, instead of getting others to be your alarm clock/secretary, get them to join in.

Live near friends? Ask if they want do weekly groceries together. Having a planned shopping trip with someone with whom you can compare lists is an excellent way to prevent accidental overspending. The average person spends over $110,000 on impulsive purchases, but a planned shopping trip can reduce on-the-spur buying by 20%.

Hate doing taxes? Find or make a group of friends you trust and set aside time to do them together. Make it a social event, with drinks and snacks, if you really don’t like number crunching. Set it up so that every year around tax season, you get in the rhythm of calling everyone up and meeting for a bite and spreadsheets.

Married? Every month, sit down with your partner and go through your bank statements together. 2 in 10 couples keep their partner in the dark about their debt. Help them stay in the green by catching excessive spending early. Do it on the same day if possible, like the first Saturday of each month. This makes it into a pattern your body will be compelled to follow.

There are two main reasons for doing these kinds of group exercises: socialising for emotional benefit, and creating accountability.

The former is fairly obvious: it’s well documented that humans have much better mental health and emotional stability if they socialise responsibly. Making arranged times to meet with people helps you to make a social tempo, which helps introverts get out more and keeps extroverts from accidentally spending too much time chatting.

As for the latter, accountability is the psychological key to getting the most out of your social life. Accountability makes processes easier and improves decision-making; knowing that your actions affect others makes you 65% more likely to complete them.

The main reason you want to be action-oriented is that research found that focusing on results instead of the process actually made people less likely to hold themselves accountable, and way more prone to self-justification and excusing behaviour.

Without set events with other people, you’re much more likely to dodge responsibility.

That’s why you should focus on social activities to encourage proactive accountability. One in five women don’t keep track of their spending: taking advantage of your social network to become more responsible as a person will ensure you’re one of the other four.

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4) Five sources to start raising your financial literacy

The internet is a cornucopia of information for those who want more. But what seems a blessing can easily become a curse.

Someone once described looking for answers on the internet as trying to drink water from a firehose. In the deluge of information, it’s often hard to find specific information. So here are a few choice resources to help funnel the lake through some taps.

The Honest Money Conversations podcast discusses a variety of topics concerning your relationship with money and methods to develop or change it. Honest thoughts in the form of easy banter, a good place to start is their episode on Getting Creative with Money.

The MoneySense magazine has a dedicated column section where you can ask specialized questions of guaranteed professionals. Covering everything from car engines to reading of a will, the MoneySense reply on Finding a Financial Adviser exemplifies the thoroughness of their replies.

The Mr. Money Mustache blog is a wealth of lifestyle pieces all centred around living a frugal yet fulfilling life. For anyone who’s ever been conflicted about the need to spend against the need to save, then the post about the weakness of luxury is a must-read.

The r/PersonalFinanceCanada forum on Reddit is a perfect place for anyone who wants to vent their emotions, positive or negative. See this thread, for instance, in which a giddy student celebrates paying off their student loans to the congratulations of strangers.

The Scotiabank Auto Loan Payment Calculator is a free online calculator which helps you quickly and efficiently figure out a payment plan for an automobile you might be interested in.

Make a habit of working some online finance into your daily routine. If a content creator you like has a set schedule for releasing new information, then check in routinely. This will not only let you stay up to date on any new happenings, but it will help you make personal finance a common presence in your life, and thus much harder to ignore.


In summary, begin habitualizing certain behaviours to shift your mentality and understanding of the financial world. Financial literacy is more than just understanding the terminology; it’s about understanding the mentality. Slowly introducing finance into your normal life will raise your awareness and comprehension of this field.

These tricks will help you raise your financial literacy:

  • Normalize financial sources into your daily routine so that you can quickly raise your basic literacy
  • Find and become a role model to create a positive feedback loop about the financial knowledge you’ve learnt and put into practice
  • Social networks are an opportunity to become proactive in your learning through use of activity-based accountability
  • Take advantage of the myriad of online tools and information outlets to stay constantly informed on the financial world