Talk With Your Kids About Money


by Barb Duncan

Your 14-year-old needs a new bike. He has outgrown his old one, thanks to a growth spurt, and he’s itching to get out on two wheels as soon as the snow’s gone. Do you buy it for him? While a bike may be considered a “need” in a lot of families, Junior isn’t interested in a basic model. He wants a mountain bike, a Raleigh Tokul 2 to be specific. The price tag is $900. 
It’s a teachable moment, parents. The bright blue paint job on that snazzy performance bicycle might be just enough incentive to drill home those periodic, at-home lessons about saving for what he wants. After all, as research has proven, the ability to delay gratification is critical for success in life. Kids need to learn if they really want something, they should wait and save to buy it.

If a good chunk of Junior’s pocket money earned through snow shoveling, babysitting or dog sitting goes into a savings account, he can get that bike all on his own. Then, maybe 25 years from now, when the days are numbered on his family vehicle and he needs (wants?) the 2041 version of a minivan, he’ll have the wherewithal to make it happen without taking on excess debt.

Financial literacy starts now. At home. Children as young as age three can begin to learn concepts such as spending and saving. The knowledge matters for every member of the family. Consider this: “Nearly 50 per cent of Canadians struggle with simple tasks involving math and numbers, and 72 per cent of adult Canadians are not fully confident in their money management skills,” according to ABC Life Literacy Canada, a non-profit organization that inspires people to increase their literacy skills. “Poor numeracy skills and low financial literacy affect individuals and families across the country, impacting their ability to complete daily banking tasks, quickly count change while shopping or save for the future.”

Financial literacy starts at home.

How are your financial literacy skills? It’s an important question. The 2014 Canadian Financial Capability Survey, sponsored by the Financial Consumer Agency of Canada, offers a look at how adults are managing money and debt, as well as planning and saving for the future. 
It’s clear kids aren’t the only ones who need to get focusing on money matters. These are some of the study’s key findings:

Just 46 per cent—less than half—of Canadians have a budget. This is a drop from 2009, when 51 per cent of Canadians reported having one.

Of those who do have a budget, almost all—93 per cent—stick to it.

People aged 35 to 44 struggle the most to make ends meet. This reality hasn’t changed since 2009. It’s not surprising, given that those under age 45, particularly homeowners and young families, carry 60 per cent of the debt.

As the survey report notes, budgeting wisely and tracking expenses are critical life skills. They empower people to live within their means and achieve financial goals. Potentially, the more skilled you are at budgeting, the less you’ll struggle when times are tight financially. You’ll have the tools to cope.

Your kids need those life tools too. Nobody wants them to struggle with finances when they’re older because they didn’t develop the know-how to manage.

That’s why a couple of facts always add up accurately:

It’s never too early to start teaching your kids about spending, saving, and needs versus wants.

Constructive, ongoing family discussion about money benefits everybody.

Here are some financial literacy tips, provided by ABC Life Literacy Canada, to work into your daily family routines and get you started:

Pick two things you regularly spend money on as a family. For one month, track how much you spend on them. How do they compare to each other and to how much you spend on other things? Talk about whether the value is worth the cost.

Keep a money journal for a month. Record every purchase or payment you make. Touch base once a week to track how you’re doing. Let kids know the kinds of things that cost money to run a household.

Pick something to save for as a family. How can everyone help contribute? Now put your savings plan into action. Evaluate and adjust your plan if necessary.

Before you go to the grocery store, set a budget and make a shopping list. Sit down together and decide how much you’d like to spend on different categories, such as fruits and vegetables, dairy, meat, grains, and treats. When you go shopping, try to stick to your budget. What parts were difficult? What parts were easy? What items were needs, and what were wants?

Set up “money jars” for allowance: one jar for savings, one jar for wants and one jar for donations to help others. (Or create your own categories.) Decide how you will split up the weekly or monthly allowance between these categories. Stick to your plan.


Wednesday, April 20, is Talk With Our Kids About Money Day

There’s also a whole day devoted to getting the money talk and action started.

The third Wednesday in April is Talk With Our Kids About Money Day. Through this initiative there are resources available for ’rents to help youngsters learn about money and prepare for their financial future.

Developed by the Canadian Foundation for Economic Education, Talk With Our Kids About Money is a free, online program that includes easy activities that can be used with kids of all ages. See for details.

ABC Life Literacy Canada has also created tools and resources to help you improve money management skills. You can download them online for free, including an activity booklet called Financial Literacy for the Family. See





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