Raising Financially-Smart Children
The life-long benefits of teaching your children good money habits make it well worth the effort.
Teach children the basics of earning, spending, and saving when they are young (e.g. age 5). Here are some suggestions:
- Give children under the age of 5 small amounts of money once in a while and let them buy something on their own.
- You can begin giving an allowance at an early age (e.g. 5, 6, or 7) but set clear guidelines on how the money can be spent. When deciding on the amount, consider the child’s age, their needs, and your family’s financial situation.
- When your child is in their early teens, you can start talking to them about long-term goals such as saving for a car or college/university.
- Encourage your child to find part-time work when he or she is between 16 and 18.
- Teach children about social responsibility when you are teaching them about money and encourage them to donate money to a charity or volunteer their time.
- Teach older kids how to invest by using the internet to research stocks or mutual funds and set up a mock portfolio, teach them how to balance a checkbook and how to track their earnings and expenditures.
- Teach good consumer habits. One of the most important things you can teach your kids is how advertising can influence their buying decisions and how they can resist giving into the advertiser’s message that buying its product makes them look cool or feel good.
- Give children opportunities to earn money. Whether they go beyond doing their chores or do a specific job you need help with, give them extra opportunities to earn money.
- Teach children about credit. Tell them that credit has to be paid back, often with high interest rates, and that only when they have a plan to pay it back should they get a credit card.
- Teach children about budgeting their money. Even if they only get a few dollars a week, children can list things they want to do with their money and whether they have the money to get those things.
- Consider what you will call an “allowance.” Some financial experts believe that the concept of an “allowance” teaches children that they are given money for doing nothing and that the amount automatically increases with age. Instead, consider giving “work money” in exchange for completed chores. As the child grows older, increase their share of household responsibilities and, similarly, the size of the “work money.”
For more information the following resources may be helpful.
- Intimacy: The Art of Relationships. Psychology Today. https://www.psychologytoday.com/us/articles/196912/intimacy-the-art-relationships
- Parenting Resources and Support. Government of Canada. https://www.canada.ca/en/public-health/services/health-promotion/childhood-adolescence/parent/parenting-resources-support.html
- Healthy Families BC. https://www.healthyfamiliesbc.ca/parenting
- Growing Healthy Canadians: A Guide For Positive Development.
- What do I need to know about getting a divorce? https://www2.gov.bc.ca/gov/content/life-events/divorce/family-justice/family-law/separation-divorce/what-do-i-need-to-know-about-getting-a-divorce
- Families Change: A Guide to Separation and Divorce. https://www.familieschange.ca/
- Relationships – Tips For Success. https://www.betterhealth.vic.gov.au/health/healthyliving/Relationships-tips-for-success