Introducing your children to personal finance

Adapting learning to your child's age

Learning financial management takes several years. The earlier you start, the more likely your children will adopt sound financial habits and become savvy consumers in adulthood. Of course, financial management lessons should be adapted to your child’s age. On the one hand, young people learn quickly with games, but on the other hand, teenagers learn through practice and the application of learning.

In the following paragraphs, you’ll find out how to adapt personal finance teaching to your child’s age.

Financial education for children

First, remember that the goal is for your children to develop healthy financial habits as early as possible in their lives. It’s much easier to instill a good habit than to change it in adolescence or adulthood.

So, from the age of 3, you can play role-playing games (e.g. cash register) and educational games (e.g. Monopoly Junior). You’ll find examples of games in the next section, “Fun and educational games”.

You can incorporate money lessons into everyday family activities like grocery shopping, going to the bank or shopping for back-to-school clothes. As a general rule, children retain learning from personal experience more easily.

From the age of 8, you can teach your child to take advantage of discounts and promotions. You can also involve him/her in family decisions that involve financial choices, such as buying a new car or taking a trip.

In addition, you can give your child a littlepocket money and let him or her make mistakes. It’s better to make a mistake on a few-dollar toy than on a several-thousand-dollar purchase when you’re an adult.

Finally, you can explain the difference between a need (eating) and a desire (buying a new video game).

Financial education for teenagers

For teenagers, the goal is to help them become adults who will be able to manage their personal finances well and avoid debt.

So when your young children are teenagers, you can start talking to them about budgeting. Then you can take the opportunity to open a bank account.

Some institutions now offer accounts designed for young people, with a prepaid card and parental controls. One example is the Wealthsimple kids and teens account, which lets you schedule an allowance and set spending limits. It is not available in Quebec yet.

In addition, you can help your teen set savings goals (e.g., buying a new mountain bike). Don’t hesitate to explain the difference between needs and wants, and the resulting budgetary choices. But also, the concept of indebtedness when talking about payment by debit or credit card. This is an important subject, as children are less and less exposed to cash.

If your teenager has started working part-time, take a few moments to sit down with them and help them understand their first pay stubs. You can use this opportunity to explain taxes and social contributions (redistribution of wealth).

Finally, if you’re saving in an Education Savings Plan(RESP), you can discuss the subject of post-secondary tuition fees with your teen.

Financial education for young adults

Your child is now a responsible young adult. But financial education is far from over. The goal is therefore to explain more advanced financial concepts that will have a significant impact during their adult lives.

If your child is a post-secondary student, you might suggest opening a student chequing account. For example, BMO’s Student Performance Chequing Account or Scotiabank’s Student Banking Plan have no monthly fees while you’re in school.

Normally, with the financial education you’ve given your child, he or she shouldn’t have any consumer debt. But if they do, explain why it’s better to pay off debts as quickly as possible.

If your child is passionate about personal finance, they can read websites, blogs, and join groups and communities on social media. I am thinking in particular of the private groups Milesopedia and EducFinance, L’argent ne dort jamais.

Finally, you can explain to them the concept of compound interest as well as tax-advantaged accounts, such as the FHSA, the TFSA and the RRSP.

Fun and educational games

Did you know that there is a wide range of games that are both fun and educational?

That said, you don’t necessarily need to buy a board game, especially for young children. In fact, you can simply role-play with your children. For example, you can run a grocery store or a restaurant if you have a children’s play kitchen at home. Then, if you have a cash register, you can make purchases and carry out transactions.

Otherwise, among educational board games, the most popular are “Monopoly Junior” and “Pay Day”.

• Monopoly Junior is a game for children aged 5 and over that helps them understand the power of money. Players learn how to handle money, make transactions, pay rent and much more.
• Pay Day is a financial management game designed for children aged 8 and over. Players learn how to manage a budget and have fun earning and spending money.

Finally, BMO has a section of its website (The Zone) that offers games and activities on the theme of money for young people aged 5 to 15. For example, for children aged 5 to 6, the proposed activities are “Make your piggy bank” and “Memory game with money”.

Books on financial education for children

Educational games are great. But did you know that there are also excellent books on financial education?

For example, Fric & fortune has written books to help families educate their children in personal finance. For example, the book “La tirelire de Viktor” is dedicated to children aged 4 to 10, while “Ton argent, gère-le !” is written more for teenagers.

Another example of books on financial education is the “Lire et Tirelire” series by Charles Hunter-Villeneuve. The 3 books in the series, presented in comic strip form, aim to awaken Quebec families to the importance of taking care of their finances and making sound financial decisions. Note that these comics are designed for parents, who can then share their knowledge with their children or teenagers.

Documentary series on finance and financial independence

In addition to educational games and books, there are also documentary series on finance and financial independence. Of course, we are talking about documentaries primarily aimed at young adults. Mais, aussi, aux adolescents qui sont vraiment intéressés par l’argent à leur âge.

Here are two examples of documentaries:

• The” Format économique” documentary series, with 10 episodes of 15-20 minutes each. This series is produced by Savoir média in collaboration with the Institut de planification financière.
• The independent documentary series” Liberté: Un éveil à l’indépendance financière” by young director Antoine Denis. In the first 67-minute feature, 12 Quebecers discuss money, wealth and freedom.

Financial education initiatives

Talking money with our CFEE kids

The Canadian Foundation for Economic Education (CFEE) has launched the “Talk With Our Kids About Money (TWOKAM)” project, which offers financial education tools for children as young as 5. The goal of the program is to help parents start or continue discussions about finances with their children.

In addition, “Talk With Our Kids About Money” is a day where teachers and parents can discuss money with children. The event website offers easy-to-use resources. Parents and guardians can consult the “Home Program” resources, while teachers can consult the “School Program” resources. This year, “Let’s Talk Money with Our Kids Day” is May 15, 2024.

CPA Canada's Financial Literacy Program

CPA Canada (Chartered Professional Accountants of Canada) offers a guide to teaching children about financial management.

The guide includes resources to help you talk to your children about finances: how to draw up a budget, how to set goals, and more. Although this guide is only available in English, we wanted to mention this initiative.

Bottom Line

In short, money plays an important role in life, and parents play a key role in their children’s financial education. Parents need to start talking about money as early as possible, and incorporate lessons into everyday life. However, financial management lessons should be adapted to your child’s age. In this article, we have discussed tips, but also shared educational games, books and documentary series.

To find out more, take a look at this guide to personal finance.

How do you talk to your children about money?

Talking to your children about money is a critical part of their financial education. First of all, you need to be open to talking money with them. What’s more, you need to choose the subjects and adapt the learning to the age of your children. There are educational board games, children’s books, documentaries and other initiatives to help you.

How can a child save money?

A child who receives money at a birthday party or pocket money may decide to save it. Of course, he could use a piggy bank if he’s still young. However, from adolescence onwards, you can open a bank account for your child, such as a youth checking account.

What are the basics of personal finance to teach young people?

The basic personal finance concepts to teach young people include income, savings, expenses, budgeting, and debt. However, when your children become teenagers or young adults, several other money-related topics should be discussed with them. For example, the concept of compound interest, tax-advantaged accounts, etc.