Since November is Financial Literacy Month and today is Universal Children’s Day, this weekend seems like the perfect time to start talking to your kids about money, and the importance of financial responsibility. Getting your kids on the right track with money early in life, will help them make better choices in their future, which will make big purchases like buying a home, a lot easier.
“As more financial decisions are faced by Canadians at younger and younger ages, grasping financial principles early in life is crucial to being better prepared to participate in the Canadian and global economy and avoiding pitfalls in financial decision making.” — Financial Consumer Agency of Canada
According to this financial resource, 66% of parents who have tried to teach their kids about money, said they needed more help. So to get things started for you, here’s some easy tips to follow.
- Have open conversations about money when your kid are around, so that they are already familiar with financial terms and the concepts. Make the topic of finances less of a taboo topic at home.
- Start simple when your kids are young with very basic concepts, such as counting and learning what value our coins and bills are. This is an easy and necessary first step.
- Progressively add more lessons and you can start to introduce things as they age like what needs are, versus wants. When they are a bit older, you can begin to teach them about budgeting, income and expenses.
- Take advantage of teachable moments when you are in everyday life, such as comparing prices while shopping or looking for coupons, etc.
- Get them involved and make learning interactive. Research shows that kids learn better when they are doing so with an activity or participation.
- Lead by example because your kids model a lot of behaviours after you and that means money choices as well. Be responsible with your own finances and in turn you’ll be instilling those values in your children.
- Introducing the basic concept of how much money people have to spend on things, is a notion you can start to talk about when kids are between 4 and 8-years-old.
- Introducing saving is perfect for the 9 to 14-year-old age range, and this is also a great time to get your kids set up with a savings account as well.
- The big money lessons for life will come between 15 and 18-years-old, and this is when you’ll want to introduce concepts like different forms of payment (credit, debit, etc.), small investments and especially the idea of “living within your means”.
If you want some great tools to get these conversations and lessons going, the Financial Consumer Agency of Canada has some free resources on their website. If you know of some other great resources, please let us know about them on Twitter.