Talking about money is a topic that many Canadians are uncomfortable with. This is often due to the misconception that someone’s worth is directly reflected by how much money they bring in. Regardless of what feelings money stirs up within you, if you are a parent, you should take the time to educate your kid(s) about money.
In this blog, I highlight some tips that you can use to raise money-smart children:
Keep it simple: Teach your children the basics. What debt is, and why it can often be bad. Why saving is important. How to get the most out of your money. These simple lessons can go a long way towards fostering a healthy relationship between your child and their future financial responsibilities.
Involve them in your budgets: If you’re going grocery shopping, consider allotting a small amount of money (five dollars, for instance) for your child to spend on items they want to get. This will teach them that they can’t buy everything they want, and to be wise in terms of how they spend their money.
Make them earn their money: If you give your child an allowance, make them work for it. Consider rewarding them more generously if they do great work vs. the bare minimum. By working for their allowance, they will be more conscious the effort that went towards earning their spending money.
Teach your children to save: If your child is earning money, whether that be through chores, an allowance, or any other means, you should make them set aside a small amount every time. When your child’s savings grows large enough, they can use this to make a larger purchase for an item such as a new video game. This can be a very rewarding experience for your child and teach them about the value of saving.
Investing: Once your child is old enough, it is a good idea to teach them about the benefits of investing. Teach them the basics, so as not to overwhelm them. Help them understand the differences between mutual funds, stocks, ETFs, and GICs.
By educating your children, you will be setting them up for success when it comes to managing their finances. If you want to become more money-savvy yourself, consider checking out some of the many great (and free!) programs that we have.