The OTHER talk to have with your kids: Money Management
It’s back to school time and this year’s at-home curriculum should include studying up on wise spending habits. In fact, a survey by PC Financial says Canadians are starting to talk to their kids about finances earlier.
With record high inflation, cost-cutting is becoming a family affair. 89% of parents surveyed reported that they began discussing finances and basic money management with their children by the time they turned 16. The survey also examined Canadians’ comfort levels and their confidence with basic financial management, like how to budget and save. Nearly nine-in-ten parents (87%) felt they were setting a positive financial example for their children, and three-quarters of youth (77%) said their parents’ money habits have positively influenced how they manage their money today.
“Canadian families are telling us they are open to having the “financial talk” with their children at a much younger age than previous generations, to help them plan smarter for a better future,” explains Carola Corti, SVP & General Manager of Payments at PC Financial.
And it seems that kids are far more cash savvy than they used to be. Three-quarters of youth surveyed (77%) say their parents’ money habits have positively influenced how they manage their money today. Interestingly, according to the survey, youth (85%) are significantly more likely than parents (77%) to be confident in their ability to save money. The vast majority of youth (85%) say they are comfortable talking to their parents or guardians about finances.
“Talking about finances is getting easier because youth are embracing the many tools and tips available at their fingertips. Kids have access to more information than any previous generation,” says Jackie Porter, Certified Financial Advisor. “Back-to-school season is the perfect time of year for parents to check-in with their kids to help them to gain a better understanding of money.”
Credit Canada has some great tips for teaching your kids about the value of a dollar.
Ages 3 to 6
Explain what money is and what it looks like. You can play store and have your kids buy things with “their” money. This will help them learn that when they spend their money, it’s gone for good.
Ages 7 to 9
At this age, you might want your child to start managing a small allowance. Help them make a list of possible choices for spending their money. Talk about spending and saving – they don’t have to spend all of their money as soon as they get it (a good idea for parents to understand as well). This is a good time to have them open up a bank account and put money away for something special. Help them read price tags and to look for sale items. Show them how their money can go further.
Ages 10 to 12
Talk about the importance of setting smart savings goals and have them start saving for a larger purchase by having them deposit some of their money into their bank account. They also need to learn about taxes and how to calculate the total price of a purchase.
Ages 13 to 14 Help your child set up a 2-week spending plan. They need to determine how much money they have coming in and how much can go out. It’s never too early (or too late) to learn that you can’t spend more money than you have coming in. Maybe they can earn more money by doing extra chores around the house or doing small jobs for neighbours. Let them see how long they will have to work to make their purchases.
