How Are Your Children Learning About Money?
We learn about geography, history and science in school, but when it comes to money, we’re on our own for the most part. Although there are some money-related courses available in the public school system, they’re not mandatory in many provinces.
Financial literacy is such an important topic, yet it’s often overlooked. Mismanaging your finances has all sorts of consequences. If you rack up a lot of credit card debt, you could have a tough time getting approved for a mortgage when you’re ready to buy a home later in life. Likewise, many couples fight over money – it can lead to divorce in some cases.
Let’s take a look at four ways children and teens – the next generation of adults – are learning about money and what you can do as parents to help them.
Financial Role Models
Celebrities have a lot of influence on society. They influence the clothes we wear, the food we eat and the gadgets we buy, but their influence doesn’t stop there. While Hollywood has a bad rap for short-term marriages and stars who go broke, there are plenty of financial role models for children to look up to.
I’m a big fan of the TV show Shark Tank. Mark Cuban, one of the sharks, is a self-made billionaire. Cuban may be wealthy, but he worked hard for his wealth and doesn’t part with it easily. He often preaches the importance of diversifying your money and not putting all your eggs in one basket. He’s become a financial role model for children across the country who want to follow in his footsteps and become successful entrepreneurs.
Retired NBA legend Magic Johnson is another financial role model. When he was forced to retire from the game he loved after testing positive for HIV, he didn’t let it get him down. He built a business empire by investing his money wisely.
When it comes to financial literacy, it’s the responsibility of the provinces to educate. As such, how financial literacy is handled depends on where in Canada you live. The Financial Post recently wrote an article on financial literacy in the different provinces from coast to coast.
In Ontario, which is Canada’s most populous province, although financial literacy is part of the curriculum, it’s up to individual teachers as to how in-depth they want to cover it. That’s a step up from Saskatchewan, where it’s not yet part of the core curriculum. For parents, it’s a good idea to find out the degree of financial literacy being taught to their children at school, and supplement it where necessary.
As a parent, you teach your child to walk, ride a bike and drive a car, but many parents are hesitant to talk to their children about money, and it remains a taboo topic rarely discussed around the dinner table. That needs to change. An easy way to help your child learn about money at an early age is by giving them an allowance. You can take that a step further by helping them get into the habit of saving. A good way to facilitate this is by having them set up their own bank account.
Children are curious and always looking for new ways to learn. As a parent, you can turn just about anything into a teachable moment. For example, you can talk to your kids about the election process when the presidential debate is on TV.
Financial matters can also be used as teachable moments. When your son or daughter lands their first part-time job, you can talk to them about the importance of saving for college or university. Even if you have an RESP set up for your child, getting them into the habit of saving will help them later in life when buying a home or car. Through these teachable moments, you can instruct your child on how to be financially literate and responsible, setting them on the right path in life.
Financial literacy is a critical skill for kids to pick up, and will help them throughout their lives. As long as you ensure they’re learning it the right way, the better off they’ll be in the long run.