Research shows that one in four Canadians feel that talking about money is a taboo topic. While parents can begin teaching their children about financial literacy at any age, many avoid the issue. However, teaching kids about the basics of money at a young age can help better prepare them for major life decisions as an adult. With the right education and encouraging healthy habits early on, you can help your child prepare to save, maximize their own income, and manage debts in the future, which are priceless skills.
Make financial literacy fun for kids
A good lesson for children to learn early on is the power of saving. That $20 bill Grandma gave them can supplement their allowance, allowing for a bigger purchase in the future if they save it now. To help demonstrate the benefit of saving, brainstorm some ideas with your child about what they might want to save up for. Remembering to keep things fun will yield the best results when teaching young children about money.
Leveraging programs offered by local financial institutions can be a helpful and easy way to teach children about money management and financial values in an interactive way. For example, BlueShore Financial in Vancouver offers a “Wishbank” program that provides a free cardboard “Wishbank” divided into three parts labelled as save, spend, and share. Money can be dropped into each segment and can eventually be used to buy a much-anticipated toy, deposit a large sum at the bank, or donate to a good cause. All of these options should be encouraged and celebrated. These types of programs can be found at different financial institutions and are intended to ease children into financial literacy with simple, friendly guidance.
Use technology with teenagers
Teenagers are often among the most tech savvy of all of us, so why not take advantage of it? There are many reputable apps available for smart phones that can help teens (and adults) budget and keep track of their funds on a daily or monthly basis. Learning the importance of budgeting is a valuable skill at any age, and it helps create habits early on in life to set the framework for financial responsibility. Teens can track their allowance, payments received from babysitting or their job at the mall, and save up for something they really want over time.
However, it’s always important to note that with technology can come some security risk, as cybersecurity is a growing issue in Canada, with individual Canadians losing millions to cybercrime fraud each year. Always read the fine print before downloading any apps. At the same time, you can use this as an opportunity to talk to your children about protecting themselves when using applications or online banking platforms.
Be honest with young adults
When it comes time for young adults to head off to post-secondary school, what they have learned about financial habits really comes in to play. They may need to budget for groceries or rent for the first time. It can be helpful for parents to be as open as they can about some of their own past financial regrets or experiences, as young adults can learn from these real-life examples.
And remember, although young adults may have basic financial knowledge, further mentorship might be needed as they can now qualify for credit cards, loans, and rental agreements. Being honest about your past mistakes with spending, saving, or debt can help them better understand the value of money and what not to do.
Family discussions about money are helpful at all ages, and as your child grows, you can introduce more sophisticated financial management concepts over time.
Woody Yang is a Financial Advisor with BlueShore Financial, committed to delivering expert advice and personalized solutions. She has over ten years of experience and holds the Certified Financial Planner® (CFP), Charted Investment Manager (CIM) and Fellow of CSI (FCSI) designations and is a Chartered Life Underwriter® (CLU). She is continually inspired by her clients’ life stories and dreams, and is passionate about the opportunity to help them achieve their goals.