Kids & Money
Teach Your Children About Money Before They Leave Home
Guest post by Canadian Budget Binder
Do you have a friend who lived at home into their 20s after post secondary and their parents never wanted any rent money?
Were you jealous because you had to work and pay rent to your parents? When you moved out I’m betting you had a better understanding about paying rent and bills on your own potentially saving you from becoming a statistic of debt in Canada.
It doesn’t matter if your children are 5 or 25 – teaching them about money is better later than never. I suggest teaching them when they understand numbers and how to count… little by little you can guide them into what to expect in the real world. We tell them no at the candy shop but do they understand why? It’s not always about their teeth or they will ruin their dinner.
Tell them the truth.. you don’t want to pay for it neither and tell them why.
Top Ideas To Teach Your Children About Saving and Money
- Saving for a rainy day- what is Emergency Savings?
- Saving to pay off debts- what is a Debt? Why should you avoid Debt if possible?
- Saving for Education- Not all parents open RESP’s so teaching children about saving for school is imperative.
- Bank accounts- types of accounts and what happens with a bank account, why we need them.
- Tax- Why do we pay tax? How much tax is calculated and on what items?
- Credit Cards- What are credit cards? When should we use them? When should we not use them? Interest rates?
- TFSA- What is a TFSA and when can they start putting money away?
- Temptation- The Difference between a “Need” and a “Want”
- What happens when you don’t pay your bills
- What is bankruptcy?
- What is a credit check?
- Why they should stay away from “Pay Day Loans”
- What is keeping up with the Jones and why they shouldn’t
- How to grocery shop using coupons and looking for deals, sales, flyers
- How to make a budget for university, college or while they live at home
- Why it’s important to save a portion of their pay for the future if they work while in school
- If they see money on the ground to pick it up
- Don’t be afraid to ask for assistance if they don’t understand
- Research what you plan to purchase
- Impulse shopping -what is it? Why they should avoid it?
This list could go on and on, but you get the picture. Of course there are different stages in life when we teach our children about money. You aren’t going to teach your five-year-old how to save for a down payment on a house rather why it’s important to save part of their birthday money for a need rather than a want.
When parents budget to give their children an allowance they should tie that allowance to chores around the house or even walking the family pet. When children are just handed money they don’t learn a sense of responsibility rather you teach them that they are entitled. This can turn into ‘desires’ when they get older which could cause them to spend without consequence until it’s too late.
A great way to teach younger children about money is to have them get a job as a paper carrier or insert delivery boy/girl. These jobs are relatively easy with no payments being sought as it is either a free home delivery or payment is through the newspaper.
A babysitting job is just as common today as it was when we were young in the 80s. Encourage your children to seek out these life experiences as they look good on a resume when seeking out their first real employment opportunity.
Children can learn:
- time management skills
- interpersonal skills
- responsibility for actions
- knowledge that money is not free you need to work to get paid
- ability to work on their own or in a team
- how to problem solve and brainstorm
- how to save money
Parents Need To Lead by Example!
If parents lead the way for their children they will thank them one day when they are old enough. If you feel you are not educated enough you can easily contact any financial institution or advisor who would gladly sit down with you and your child to explain money and saving. That’s a great time to learn along with your children to show them you are interested in their future. Children seem much more involved when you turn something into a learning excursion all about them.
You can read some other great tips in this article about Teaching Children about Money.
About Canadian Budget Binder
We’re your average married Canadian couple in our 30′s budgeting to live a comfortable life. Join me, Mr.CBB as I blog about our actual Canadian Budget, Net Worth, Monthly Grocery Challenge,Money Saving Tips, Deals, Frugal Recipes and more. Visit CanadianBudgetBinder to learn about budgeting, finance, frugal tips, recipes and more!