Introducing your children to personal finance

Parents of young children and teenagers play a key role in their financial education. Children won’t adopt sound financial habits unless they’re taught. And, in my opinion, teaching personal finance is just as important as reading, writing and math. Whether we like it or not, money plays an important role in our lives. Ideally, we should start talking about money as early as possible, and integrate financial education into our daily lives. And since children often seek to imitate adult behavior, parents must start by setting an example.

These are just a few of the tips that will be covered in this article. We’ll also explain how to introduce your children to personal finance in an age-appropriate way, with the help of educational games, children’s books, documentaries and various initiatives.

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, teaching about financial management needs to be adapted to your child’s age. On the one hand, young people learn quickly with games, but on the other, teenagers learn with practice and application.

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

First of all, remember that the goal is for your children to adopt sound financial habits as early in life as possible. 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 them 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 want (buying a new video game).

For teenagers, the goal is to help them become adults who can manage their personal finances 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.

You can also 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.

Your child is now a responsible young adult. But financial education is far from over. The aim is to explain more advanced financial concepts that will have a major impact on 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, he or she can read websites, blogs and join groups and communities on social networks. I’m thinking in particular of the private groups Milesopedia and EducFinance, L’argent ne dort jamais.

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

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 could run a grocery store or restaurant, if you have a children’s stove at home. Then, if you have a cash register, you can make purchases and carry out transactions.

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”.

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, “La tirelire de Viktor” (available in French only) is aimed at children aged 4 to 10, while “Ton argent, gère-le!” (French only) is written for teenagers.

Another example of books on financial education is Charles Hunter-Villeneuve’s “Lire et Tirelire” series (in French only). 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.

In addition to educational games and books, there are also documentary series on finance and financial independence. Of course, we’re talking about documentaries aimed primarily at young adults. But also to teenagers who are really interested in money at their age.

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.

The Canadian Foundation for Economic Education (CFEE) has launched the ” Let’s Talk Money with Our Kids ” project, which includesfinancial education toolsfor 5-year-olds. The goal of the program is to help parents start or continue discussions about finances with their children.

What’s more, ” Money Talk Day ” is a day when teachers and parents can discuss money with their 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 (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.

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, learning about financial management needs to be adapted to your child’s age. In this article, we’ve covered tips and tricks, but also shared educational games, books and documentary series.

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