Kids and money: making sure the message hits home
Teaching your child about money takes a fine balance of patience and persistence. To make sure the message sinks in, keep it light while finding ways to bring money into daily activities.
10 ways to help your child get smarter about money
1. Appeal to different learning styles
Some children learn better by hearing, some by seeing, some by handling or moving objects – or a mix of one or more. Look for activities that best suit your child’s learning style.
2. Consider their age in your approach
Your child’s ability to grasp certain financial concepts will depend partly on their age. Use these learning stages to guide your approach.
3. Find and use key teaching opportunities
ShareShare A piece of ownership in a company. A share does not give you direct control over the company’s daily operations. But it does let you get a share of profits if the company pays dividends.+ read full definition information when it’s possible or easiest. For example, when eating out, you could use the restaurant menu to start a conversation with your child about comparing prices. If you have a teenager, you could use topics in the news, like the increase of mobile payment technology, as a bridge to talking about how to keep your credit card safe.
4. Speak in familiar terms
Keep your lessons simple and work with your child to explain the big terms and abbreviations of the money world.
5. Teach one thing at a time
Focus your lesson on one key learning; for example, if you spend your money on ‘this,’ you can’t spend it on ‘that.’ Back them up with facts or a summary message.
6. Use pictures and comparisons
Some ideas lend themselves to images. You can also use comparisons to explain new ideas: “An RRSP is like a savings accountSavings account A bank account intended for depositing funds. Pays interest and lets you withdraw cash at any time.+ read full definition but it’s to prepare for retirement.”
7. Use memory aids
Finding ways to help your child remember their money lessons – whether it’s an acronym, a list or a golden rule – can play a big part in making sure they take your teachings to heart. As your child gets older, try having them follow this list to help them keep their spending in check.
8. Offer real-world experience
Often, experience is the best teacher. Helping them learn about the basics like budgeting and bank accounts is important – but having them build a budgetBudget A monthly or yearly estimated plan for spending and saving. You work it out based on your income and expenses.+ read full definition or open a bank accountAccount An agreement you make with a financial institution to handle your money. You can set up an account for depositing and withdrawing, earning interest, borrowing, investing, etc.+ read full definition can be an excellent educational activity as well. When your children can handle money matters, let them, with your guidance.
9. Reward good financial habits
It’s very common to attach an allowance to your child’s household duties, but allowances aren’t for everyone. Consider rewarding your child’s demonstration of good money habits in any number of ways, with special privileges, outings or extra praise.
10. Walk the talk
In many cases, the way you perceive and manage your money has been influenced by your upbringing. Similarly, your child will learn just as much from what you do as what you teach. If you advise your child to avoid buying things they don’t need, follow a budget or pay down debt, do your best to live by your own guidance.