Teaching children about money in challenging times
(NC) Many Canadian families are dealing with financial difficulties of various kinds because of COVID-19. For parents, it is more important than ever to teach our children about money.
All habits, including financial ones, are difficult to change. That is why it is important to help young people develop good financial habits starting at an early age.
A recent study by the Organisation for Economic Co-operation and Development indicates that teenagers who talk about money and finances with their parents are better able to build a financially secure future for themselves.
The earlier children understand the value of money, the better prepared they will be to manage their personal finances responsibly.
There are many excellent apps and resources to help you engage your children and make financial education a fun experience. The Financial Consumer Agency of Canada has a host of free, unbiased resources and tools to get you started.
When your children are younger, start by teaching them basic concepts, such as counting and recognizing coins and bills. As they get older, continue the conversation around more complex topics. These include making a budget, the importance of having an emergency fund, and the concepts of income, expenses, savings and credit.
When talking about saving with children, discuss goals that appeal to them. For example, you can talk about how to save up money for a video game or a special activity they want to attend.
When they are teenagers, introduce concepts like using credit and managing debt. Opening a bank account for your children can be another way of helping them learn to manage money. They can develop the habits of monitoring their account balance regularly and planning their spending.
Take every appropriate opportunity to teach your children the difference between needs and wants. When out shopping or on vacation, stress the difference between their needs and their desires. Some children may think their parents have unlimited financial resources. When you involve them in family finances, they will learn more about money.