It can be exciting to watch your kids become more independent, but helping to prepare them financially for adult life can be a challenge. The good news is that according to a recent study, high school students want to learn about money. In Ontario alone, 7 in 10 teens think it’s important to learn about money, but only 4 in 10 feel prepared for managing their finances after high school.
5 ways to help your child begin their career and adult life on the right foot
1. Shift from provider to coach
For your kids to become self-supporting, you’ll need to change the way you respond to their money needs. Begin by helping them learn how to manage their money on their own.
Get them while they’re young
2. Prepare them for the costs of higher education
Whether you’ve built up savings to pay for your child’s post-secondary education in an RESP or they’ll be relying on student loans and part-time work to get them through their studies, help your child make a plan for getting an education. Paying for school, living on 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 and managing debtDebt Money that you have borrowed. You must repay the loan, with interest, by a set date.+ read full definition are all things they’ll need to know.
3. Help them keep debt from taking over their lives
Easy credit and limited experience in handling it may allow your kids to dig themselves into a financial hole. Make sure they understand when to use debt. Use the Credit card and debt calculator to help them make a debt repayment plan.
4. Support their search for employment
Today’s job market can be challenging for young Canadians, with a youth unemployment rate that’s nearly double the total unemployment rate. If your kid needs help in finding a job, check out First Work, an employment support organization for youth with branches across Ontario. Youth Canada’s website also offers useful job search resources.
5. Be prepared for a rebound
Young adults may return home after a job loss or when a relationship ends. If that happens, have a clear plan for how they’ll contribute financially to the household.
Only you and your kids can decide when they should be financially independent. Every family is different. But using these resources and others that fit your life can make the way smoother for your whole family.
In March 2012, the unemployment rate for Canadians aged 15-24 was 14.7 per cent, almost double Canada’s total unemployment rate of 7.4 per cent. (Source: Statistics Canada)
The average Canadian post-secondary student debt is $26,680. (Source: Canadian Council on Learning, 2009)