Elementary age customer using cash to pay for supermarket purchases

Why It Pays to Be Open with Your Kids About Money

Do you talk to your kids about money? If the answer is ‘no’, you’re not alone. Money is an important topic, yet it remains a taboo topic at many dinner tables across the country. How then, are children supposed to run their family’s finances one day?

Talk With Our Kids About Money Day is tomorrow, and it’s a day to help raise awareness of the financial education of children. Educating your kids about money should start early, but that’s often easier said than done. The program equips parents with the tools and resources they need in order to educate their children about finances.

Let’s take a look at why it pays to be open with your kids about money, and some of the ways to make that education easier.

Why teach your kids about the family finances?

Your job as a parent is to equip your children with the tools and knowledge they need in order to be successful adults. You can teach them to ride a bike and cook dinner, but without financial literacy, they’re missing a vital skill.

There are all sorts of negative consequences to mishandling money. About half of all Canadians currently live paycheque-to-paycheque. If they missed a single one, they would find themselves in a tough financial situation. Perhaps if these Canadians were better educated about money at a young age, they wouldn’t be in this unfortunate predicament.

A lack of financial literacy has consequences. For example, credit cards can be a powerful financial tool – when used responsibly. Many young adults get into trouble with credit card debt. They sign up for one in their freshman year of college or university for a free t-shirt. Before they know it, they’re in over their head. If they damage their credit, it can have an impact on their lives as adults. They may not be able to buy a house or car for a long time.

Depending on what province your children are attending school in, financial literacy may not be mandatory. That means the responsibility falls squarely on the shoulders of the parents. Unless you’re willing to teach your kids about money, they’ll have to learn it on their own and may experience setbacks along the way.

How to teach your kids about money

Teaching your kids about money doesn’t have to be boring. The  Canadian Foundation for Economic Education (CFEE) provides a number of fun home resources to help parents. To make educating your kids about money easier, the programs are geared towards kids of different age groups. For example, in the game “Robots,” it teaches kids between the ages of 11 and 13 about the pitfalls of consumerism – that they should happy with what they already have instead of always striving to buy something bigger and better. This is only one of the dozens of fun programs parents can use to raise money smart children.

Taking away the mystery of where money comes from is important and should not be off-limits in family discussions. Handle it right, and it will be one of the most valuable lessons of their childhood.