It's Your Money  

How early should you talk to your children about finances?

Money lessons for kids

In the ever-evolving landscape of managing your finances, imparting financial knowledge to the next generation is more critical than ever.

For Canadians, instilling a sense of financial literacy in their children is not just a good practice; it's an essential one. The question arises: when is the right time to start these conversations about money and finances?

Experts agree that the earlier parents begin discussing financial matters with their children, the better and this conversation can start as early as preschool. While young children may not grasp complex financial concepts, introducing them to basic ideas about money can lay the groundwork for a strong financial foundation and future lessons.

One effective way to introduce the concept of money to young children is through hands-on activities. Creating a play store at home, complete with toy money and items for sale, can help children understand the basic principles of buying and selling. This interactive play not only makes learning fun but also serves as a practical introduction to the value of money.

As children enter elementary school, parents can gradually introduce more complex financial concepts. Teaching them about the importance of saving money, setting goals, and making choices within a budget can be done through relatable scenarios. For instance, giving children a weekly allowance and encouraging them to save for a desired toy or treat can instill the value of delayed gratification and saving for future needs.

Middle school is an opportune time to delve into more advanced financial topics. Parents can introduce the basics of budgeting, explaining how income and expenses work together. Discussing the concept of interest, both earned through savings and paid on debts, can help children understand the impact of financial decisions over time.

High school marks a crucial period in a teenager's life when they are preparing for greater independence. Parents should take advantage of this stage to provide more in-depth financial education. Topics such as credit scores, loans, and the importance of responsible borrowing become particularly relevant as teenagers approach adulthood.

Moreover, parents should initiate discussions about the cost of post-secondary education and the various financing options available, including RESPs (Registered Education Savings Plans) in Canada. By involving teenagers in decisions about their education and the associated financial implications, parents can empower them to make informed choices about their future.

In addition to formal financial education, parents should leverage real-life situations as teachable moments. Involving children in everyday financial activities, such as grocery shopping, comparing prices, and understanding sales and discounts, can reinforce practical financial skills.

As technology becomes an integral part of daily life, teaching children about digital financial tools and online security is crucial. Explaining the basics of online banking, the importance of strong passwords, and the risks associated with sharing personal financial information online prepares children for the increasingly digital financial landscape.

It's important to note that financial education is an ongoing process. As children grow and their financial responsibilities evolve, so too should the depth and complexity of the financial conversations. Encouraging an open dialogue and being responsive to children's questions fosters a positive attitude towards money and finances.

The journey toward financial literacy in Canada begins early, and parents play a pivotal role in shaping their children's financial attitudes and behaviors. By starting the conversation in the preschool years and progressively introducing more advanced concepts as children grow, parents can equip their children with the knowledge and skills needed to navigate the complex world of finances in Canada and beyond.

Regardless of what age your children are today, and if you feel like you’ve missed the opportunity to start early, it’s never too late to begin this learning process with them.

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.

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About the Author

Brett Millard is vice-president and a member of the executive leadership team at FP Canada, the national professional body for the financial planning industry. A not-for-profit organization, FP Canada works in the public interest to foster better financial health for all Canadians by leading the advancement of professional financial planning in Canada. 

He has worked in the financial advice industry for more than 15 years and is designated as a chartered investment manager (CIM) and is a certified financial planner (CFP).

He has written a weekly financial planning column since 2012 and provides his readers with easy to understand explanations of the complex financial challenges they face in every stage of life. Enhancing the financial literacy of Canadian consumers is a top priority for Brett and his ongoing efforts as a finance writer focus on that initiative. 

Please let Brett know if you have any topics you’d like him to cover in future columns ,or if you’d like a referral to a qualified CFP professional in your area, by emailing him at [email protected].


The views expressed are strictly those of the author and not necessarily those of Castanet. Castanet does not warrant the contents.

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