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Do you know the difference between a GIC and a mutual fund? Can you calculate the cost of paying interest on a car loan? Do you know how to set a proper budget?

If you don't, you're not alone.

Last week, Toronto District School Board trustee Josh Matlow proposed curriculum changes to arm elementary and high-school students with a knowledge of economic issues and money management.

Perhaps that education should be directed at adults too, according to financial experts who say that the majority of Canadians coast through life without basic financial literacy.

"It's a significant problem that primarily stems from the fact that there is no systematic way for people to learn about this topic in schools," said Tom Hamza, president of the Toronto-based Investor Education Fund, which was established by the Ontario Securities Commission and provides information about financial and investment issues. "As a result, we learn most of this information from our parents or our family or salespeople, and there's some inherent problems in that."

Easy access to credit and an era of consumption have meant that valuable lessons about scrimping and saving learned from grandparents who lived through the Depression have been forgotten, Mr. Hamza said.

Many Canadians are only now realizing, with the recession, just how poorly they've been managing - or mismanaging - their finances. And the really scary part, experts say, is that they may make up the majority of the population.

It's only with stock market calamities, foreclosures and layoffs dominating the news for months that many Canadians have been jolted into getting the crash course in financial basics they should have mastered years ago.

So they're calling and pouring into the offices of credit counsellors, and experts across Canada are reporting a spike in attendance at personal finance seminars.

"We are getting more calls than ever in our 27 year history," said Al Antle, executive director of the Credit Counselling Service of Newfoundland and Labrador.

The Welland/Pelham Chamber of Commerce in Southern Ontario announced it will hold a free financial seminar this week on basic economic topics such as pension options and budgets. The move is in response to growing concerns in the wake of news John Deere will close its Welland plant in coming months.

The Financial Planners Standards Council, a not-for-profit organization that offers information and educational seminars, said it's being asked to make presentations at a growing number of companies, as well as to set up booths at health and wellness fairs.

"Financial health is related right now to your well-being, how you manage stress, how you plan for your future," said Tamara Smith, vice-president of the council.

With financial uncertainty spreading through the country's collective psychology, consumers want to arm themselves with as much information as possible, experts say. Canadians want to know the ins and outs of retirement savings plans, how to handle paying down debt and how to make and stick to a strict budget, according to industry veterans who say they've seen a major spike in demand for information in recent months.

The most glaring issues Canadians seem uneducated about tend to be very basic concepts with regards to saving money, Mr. Hamza said. Some of the most important pieces of advice many people don't know is the value of compound interest, and the need to budget and pay yourself first (i.e. automatically routing some of your income to savings), he said.

"I can safely say that 98 per cent of the people we see have no sense of the mechanics of a budget," Mr. Antle agreed. "People have budgets and the budget is spend 100 per cent of your income."

The basic idea behind compound interest is that people who start tucking money away at an early age will earn a great amount of interest throughout their lives. But also key is the idea of tracking all spending and knowing where the money goes. Once an individual has a firm handle on their core expenses, such as rent, mortgage, loan or car payments, they can invest the surplus toward long-term goals, he added.

Putting those ideas into practice may require a major lifestyle adjustment, but they're also some of the best ways to ensure financial success, Mr. Hamza said.

"In the cold light of day, there's a lot of spending that people do that accumulates that makes a significant difference in the disposable cash that they have," he said.

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Test your money smarts

Answer these questions to see if you would pass a basic financial literacy test.

1. What is the difference between an RRSP and RESP?
2. What does DJIA stand for, and what does it track?
3. What does TFSA stand for?
4. What type of investments are eligible to be purchased in an RRSP?

• a. Stocks
• b. Bonds
• c. Mutual funds
• d. Call options
• e. All of the above

5. What type of fund is considered riskiest:

• a. Money market fund
• b. Balanced fund
• c. Dividend fund
• d. Hedge fund?

Answers:

1. A registered retirement savings plan is used to save for retirement and a registered education savings plan is used to save for postsecondary education.

2. Dow Jones industrial average. It's a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the Nasdaq Stock Market, according to the Investopedia.com definition.

3. Tax-free savings account.

4. e. All of the above.

5. d. Hedge fund. Although in theory they are designed to hedge risk, these funds are considered to be the riskiest of these four fund classes because they have the ability to utilize leverage.

Carly Weeks