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Teach your kids a lesson – about money

Fostering good financial habits that can last a lifetime.

Financial literacy can be a challenge for many people – but young people can be at a greater disadvantage simply because they haven’t had much opportunity to build their knowledge through education and experience. 

External sources alone may not give kids a complete understanding of money and how it works in the real world. The news media tends to focus on doom and gloom aspects of the economy, such as the high cost of living, volatile stock markets and rising interest rates, which can lead them to associate money with feelings of risk and fear. At the opposite end of the spectrum, popular entertainment and social media tend to highlight big spending and luxurious lifestyles. In between, very little airtime is given to explaining the fundamentals of personal money management. 

Although financial literacy lessons have recently been added to mainstream school curriculums across Canada, they aren’t taught with a consistent level of urgency. To supplement what children may or may not learn in school, providing kids with some form of financial education should continue to be a priority for parents and grandparents. 

General awareness

Though they may not realize it, kids absorb a lot of financial concepts through everyday life, like borrowing, sharing and exchanging something in return for something else. Trading a Lego block for a friend’s piece of gum or celebrating a visit from the Tooth Fairy are, in effect, basic lessons about commerce and economics that will evolve as they grow up. The more they can learn about money when they’re young, the more confidence they will have when it comes to managing their own as adults. 

Since young people can be more receptive to learning just about anything if it’s fun, don’t discount a chance for them to work on their resourcefulness with a good game of Monopoly or Settlers of Catan. It’s liable to register on some level that money is a powerful tool that, when managed responsibly, can be key to achieving their goals in life.

Cash in hand 

Around adolescence, when kids receive an allowance or get paid for babysitting or mowing the neighbour’s lawn, the lessons of saving and spending become personal. This is a critical time to establish positive financial habits that can set the tone for your child’s future relationship with money. Having family discussions and providing ample opportunities for kids to ask questions will help them take ownership of the learning process and give parents an indication of where they could use more insight and guidance. But before delivering any lectures about how things were done in the old days, consider taking a more contemporary approach. 

Access to technology has made it easier than ever for people of all ages to get the information they need about money. Well-designed apps can teach young people some basic terminology while offering a variety of strategies for managing their own finances. Some apps are sophisticated enough to track all sorts of scenarios, from transactions, budgeting and banking to more advanced concepts like investing, the role of credit and calculating interest. Some even offer companion programs that let parents supervise their child’s progress to see where they might be having difficulty, and receive notifications when money is being spent. Working through an online program together can be a good opportunity for parents to relate some real-world examples and share the benefit of their own financial experiences. 

Helping pave the way

Of course, parents can also be instrumental in setting their kids up for success in other ways. For instance, helping them get a social insurance number enables them to open a bank account and obtain a debit card of their own. And once these are put to use, you can encourage them to review monthly statements and log the information in a finance app that charts their activity. This can help them understand what’s involved in building a financial history and, eventually, a solid credit score

Keep the conversation going

Any effort a parent can devote to helping their kids become familiar with money will benefit them in the long run. Using a variety of tactics, including conversations about everyday situations, can be the catalyst for financial lessons that can instill a sense of purpose and accountability. Like all good lessons, these should last a lifetime. 

Kids place a lot of trust in what their parents teach them – and not just when it comes to money – but they should also know that no one has all the answers. Speaking openly about the value of having an advisor can reassure them that even adults benefit from advice when it comes to keeping their financial activity and plans on track.

Financial literacy facts 

  • Only one-third of the world’s adults are financially literate
  • 73 per cent of people with high financial literacy scores claimed their education came from personal experience 
  • Only 24 per cent of millennials (born 1980–95) demonstrate the ability to understand basic financial concepts 
  • 69 per cent of generation Z (born 1997–2012) say people in their age group are more receptive to talking about money than their parents were at the same age 
  • Young adults who took personal finance courses in high school are less likely to take out high-interest loans than those who didn’t take the courses 
  • The average financial well-being score of Canadians is 66 out of 100; only about a quarter of survey respondents reported struggling financially
  • Canadians aged 18 to 34 seek financial advice from a variety of sources: 59 per cent ask friends or family members, while 51 per cent use the internet. Those aged 65 and older are more likely to seek advice from an advisor (51 per cent) rather than the internet (13 per cent) 



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