Financial Literacy Wins When Communities Show Up

A lot of people treat money skills like something you “pick up later.” Then the first variable mortgage renewal hits, a credit card balance starts compounding at 20%+, or a “good” car loan turns out to be a five-year budget anchor. The cost of learning interest rates the hard way is brutal.

That’s why I’m genuinely glad the Bank of Canada Museum’s 2025 Award for Excellence in Teaching Economics didn’t just go to educators who can explain supply and demand. It went to two New Brunswick teachers—Angela Larocque (middle school, St. John) and Nicole Feisst (high school, Bouctouche)—who pulled economics out of the textbook and into real family decisions. Their common thread: they brought parents and local professionals into the learning.

For this “Interest Rates, Banking & Personal Finance” series, this announcement is a gift. It’s a reminder that the fastest way to get better at personal finance is to practice it in realistic scenarios—with the people who actually influence your money life.

Snippet worth remembering: Financial literacy isn’t a chapter in a course. It’s repeated exposure to real trade-offs—debt, savings, risk, and time.

Why financial literacy matters more in a 2%–3% policy-rate world

The big point: even when inflation cools, interest still runs your financial life. As of December 2025, the Bank of Canada has maintained its policy rate at 2¼%. That number isn’t your mortgage rate, but it influences the entire rate “food chain”—prime rates, variable mortgages, HELOCs, business loans, and eventually savings rates.

Here’s what that means in plain personal-finance terms:

• Debt becomes more “mathy.” When rates are higher than the ultra-low era, the difference between 3 years vs. 5 years, fixed vs. variable, or $200 vs. $400 extra principal payments actually changes outcomes.
• Budget mistakes compound faster. Interest on revolving debt (credit cards, lines of credit) doesn’t care about your intentions.
• Savings finally has a fighting chance. GICs and high-interest savings accounts often look better when the rate environment isn’t near-zero.

A strong understanding of interest rates helps people answer practical questions like:

• “Should I prepay my mortgage or invest?”
• “If I carry a balance, how long until it doubles?”
• “What does ‘prime minus 0.5’ actually translate to?”

And that’s why teaching economics well—especially the parts that touch everyday banking—creates real household value.

What the Bank of Canada Museum award highlights (and why you should care)

The direct answer: the award recognizes teaching that builds real-world financial skills, not just academic knowledge.

In May 2025, the Bank of Canada Museum announced Larocque and Feisst as winners of its fourth annual teaching award. Each winner receives:

• A trophy
• $1,000 personal cash prize
• $1,000 for their school

The selection committee included representatives from the Bank of Canada, economics and education experts, and a youth representative. Nominations came from across Canada.

This isn’t just a feel-good education story. It’s a signal about what works in financial education:

1. Community involvement beats isolated classroom theory. Parents, local banks, and professionals make money feel real.
2. Simulations teach consequences safely. Students can “mess up” in a scenario and learn without losing actual dollars.
3. Money conversations reduce shame. When done well, financial literacy lowers the “I don’t know what I’m doing” barrier.

In my experience, most adults don’t struggle because they can’t understand interest. They struggle because nobody ever made it normal to talk about money decisions out loud.

Two teaching ideas worth stealing for your own family

The direct answer: the winning projects map perfectly to how families can learn money skills at home—through practice and guided conversations.

Angela Larocque’s approach: make money social, local, and practical

Larocque built community-based initiatives like:

• “Idea Market”: a money-making entrepreneurship event
• “Money Matters”: a community financial literacy night bringing together local businesses, banks, and financial experts

The standout detail is “Money Matters” creating open, judgment-free conversations between families and financial institutions. That’s rare—and it’s exactly what many households need.

Try this at home this winter break (low friction, high payoff):

• Pick one “money topic night” per month (45 minutes).
• Choose a real decision: cell plans, groceries, a used car, holiday spending, saving for a trip.
• Bring one outside voice if you can: a financially savvy relative, a friend who works at a bank, or even a trusted small-business owner.

Rule: the goal isn’t perfection. It’s reducing mystery.

Nicole Feisst’s approach: simulation beats lecture

Feisst created a personalized financial simulation for Grade 11–12 students. Each student built a financial profile, then navigated a realistic, sometimes unpredictable “adult life” path—with local pros giving real-time advice.

That’s exactly how real money works: you plan, then life happens.

A simple family simulation you can run in one weekend:

1. Create a profile: income, rent, transportation, debt, savings goal.
2. Pick three rate scenarios: lower, base case, higher.
3. Add two surprises: car repair, reduced hours, new phone needed.
4. Ask one key question: “What do we cut first—and why?”

This exercise teaches budgeting, emergency funds, and trade-offs in a way that sticks.

The interest-rate concepts people actually need (and how to explain them)

The direct answer: most personal finance outcomes come down to a short list of interest-rate mechanics.

You don’t need an economics degree. You need a few tools you can apply repeatedly.

Simple vs. compound interest

Compound interest means interest is charged on past interest. That’s great for long-term investing and terrible for high-interest debt.

A practical rule: if you only make minimum payments on a credit card, you’re often paying mostly interest early on—and progress feels slow because it is slow.

Variable vs. fixed rates

• Fixed rate: payment certainty (great for budget stability)
• Variable rate: can save money if rates fall, but payment or amortization risk can bite when rates rise

A stance I’ll defend: if your budget has zero wiggle room, don’t gamble on variable “because it might be cheaper.” Your mortgage should be boring.

Real interest rate (the “silent” concept)

If your savings account earns 2% and inflation is 2%, your purchasing power is basically flat. People get discouraged saving because they don’t see progress—but the real win is stability and optionality.

Amortization (why extra payments work)

Extra principal payments early in a mortgage cut a lot more interest than the same payments later. Time is the multiplier.

If you want a family-friendly explanation: “Paying principal early is like shrinking the snowball before it rolls downhill.”

A practical “money curriculum” for 2026 (for parents and adults)

The direct answer: you can build interest-rate literacy in 30 days with four habits.

If you’re reading this series because you want better control over your finances, here’s what I’d actually do.

Week 1: Know your rates

• Write down every debt and its rate (credit card, line of credit, mortgage, car loan)
• Note whether it’s fixed or variable
• Identify what’s tied to prime

If you can’t find a rate, that’s the first problem to solve.

Week 2: Build a one-page cash flow view

• Income in
• Fixed bills out
• Variable spending out
• “Leftover” (or deficit)

Don’t overcomplicate it. One page beats a perfect spreadsheet you never open.

Week 3: Choose a debt strategy that matches your brain

• Avalanche: pay highest rate first (best math)
• Snowball: pay smallest balance first (best momentum)

I’m pro-avalanche for most people because rates are unforgiving, but if motivation is your biggest barrier, snowball can be the smarter move.

Week 4: Lock in a system, not willpower

• Automate savings on payday
• Increase mortgage payments modestly (if it doesn’t create stress)
• Put one bill on autopay that you’ve missed before

The result you want: fewer money decisions made while tired.

Where the Bank of Canada Museum fits into your money life

The direct answer: credible, free education resources reduce confusion about central banking and everyday rates.

The Bank of Canada Museum’s role is to “demystify” the central bank’s functions and support teachers and students through free school programs, lesson plans, and activities. That matters because central banking topics can feel distant until you connect the dots:

• Central bank decisions influence financing conditions.
• Financing conditions shape mortgage rates and business costs.
• Those costs affect jobs, wages, prices, and household budgets.

If you’ve ever thought, “Why should I care about a policy rate announcement?”—this is your answer.

The bigger point: money gets easier when it’s less private

These award-winning projects are a blueprint: bring money into the open, practice with real scenarios, and use community expertise. If schools can do that for kids, adults can do it for themselves too.

For 2026, I’d love to see more families treat interest-rate literacy like a basic life skill—right up there with learning to drive. Start small: one conversation, one simulation, one spreadsheet you’ll actually use.

If you want one next step from this post, make it this: pick one rate-sensitive decision you’ll face in the next 12 months (mortgage renewal, car purchase, debt payoff, savings goal) and “pre-game” it with numbers before you’re forced to decide fast.

What’s the next money decision on your calendar—and who could you bring into the conversation so you’re not figuring it out alone?