Teaching children about money – tips for parents

Parents often question when is a good time to start teaching their kids about money? It’s never too early to teach children the importance of money saving, claims Financial Consumer Agency of Canada (FCAC). As an educational interactive tool, FCAC provides services and materials to Canadians to help increase their financial knowledge, and includes free unbiased online information on teaching children about money.

FCAC providers parents the following tips:

  • Creating positive attitude towards savings
  • Assist and encourage children on setting goals and learning how to budget
  • Show children how to make smart spending decisions
  • Consider teaching children about money management skills by giving allowance
  • Show children the opportunities in earning money through babysitting, snow shovelling, chores, mowing the lawn etc.

Parent should lead by example, children learn from watching and picking up their parents habits. Start with the basics as in recognizing the difference between needing an item or wanting it. As your children gets older, start explaning what type of bills they may expect, such as mortgage, cable, phone bills, insurance, car, food, education etc. Also start explaining what good credit is and what that could lead up to in the future. Plan to open up a saving account and discuss the difference between saving account and chequing account – this would also be a good time to open an RESP and have them contribute towards their education savings.