Expert tips on how to encourage financial literacy at home
by Jennifer Goldberg
Where are your kids getting their financial education? According to recent research by Genworth Canada, 95 per cent of Canadians agree that children should be taught the basics of personal finance and budgeting in school. But according to chartered accountant Robin Taub, financial literacy should start at home. “It’s such an important life skill to be able to manage money and parents need to feel it’s their responsibility,” says the mom and author of A Parent’s Guide to Raising Money-Smart Kids.
Taking the time to improve your children’s financial literacy is an investment in their future as well as your own. “You don’t want to be in a position where you have to bail out your adult children from messes they may have made when it comes time for you to retire,” Taub advises. These tips will help get the entire family on the path to financial fitness.
Get your financial house in order
Improving your own financial skills is key,” Taub says. “Parents should be aware that they are role models for their kid.” Demonstrate your own good money management habits by saving for your children’s education, paying down consumer debt and creating a solid family budget. It’s also important to have open and honest financial conversations with your partner so that you can present a united front when it comes to plans and goals.
Make finances fun
Turn financial literacy into a game the whole family can enjoy together. Taub recommends that you start talking to your kids about money as soon as they show an interest in it, which usually happens around the age of five. Younger children will enjoy learning about currency by sorting different denominations of coins and playing counting games with real money or in an online game. When kids get older, family game night can be a fun and low-pressure way to teach them about spending and saving. “Good old Monopoly and Life are fun ways for the whole family to spend time together but also learn a little bit about money,” Taub suggests.
Give kids an allowance
Allowance isn’t just for tweens and teens — Taub says that even young kids should be given their own pocket money. “They’re not too young to want things when you’re out with them, so if they have their own money as an allowance, they always think a little bit more about whether they want to spend it.”
An allowance also teaches children how to make decisions about what they want to do with their funds. Have frequent discussions with kids about the benefits of saving, making investments and donating to charity to help them develop a sense of responsibility around their own money.
Set family goals
If you’re coveting a large expense like a family trip to Disney World, call on the entire family to save for the cost. Ask your children to set aside a portion of their allowance for a special activity or souvenir. “You can offer to match their savings as a way to encourage them to save and work towards a goal,” Taub says. What’s most important is that the whole family understands that treats like vacations require financial sacrifice and planning.