Many parents understand that raising children means preparing their lunches for school, helping them with their homework, and driving them to hockey practice. However, some parents may not realize that one of their most important jobs is to teach their children about the basics of money management.
Don’t know where to start? You’re not alone.
Here are some tips to help you teach your children how to save, invest and handle money responsibly.
- An allowance is a great teaching tool. You can use it to make kids responsible for purchases such as toys, video games, and treats. This will help teach kids how to save for things they want.
- For young children, you can use three glass jars or piggybanks–one for spending, one for savings, and one for sharing or donating.
- For your older kids, you can open a savings account, like Alterna’s Youth Start package. You can use this to teach them about interest and why it's important to put money away every month to work towards their financial goals. You can also teach them how to manage their money safely online*.
- Discuss major household purchases with your kids and why you opted to buy one product over another. Ask them for their opinion based on comparison shopping.
- Encourage children to flex their entrepreneurial muscles by turning their interests into age-appropriate money-earning activities such as babysitting, yard work, and dog walking.
- Teenagers who get a job outside the home will need to take more responsibility for managing their money. Discuss their long-term goals (college or university or a car!) and help them develop a savings plan.
- Talk to your teen about credit and the importance of borrowing wisely and spending within their budget. When they reach 18, consider opening a joint credit card with a low limit. This will allow them to gain experience with managing and paying off debt.
- Interested in investing? Give your child a stake in the stock market by opening an account in their name with a mutual fund that invests in companies they will recognize. Slowly teach basic investing principles by tracking stock prices on a website like Qtrade and linking current events to fluctuating prices.
Children learn by example. Involving them in your financial decisions and helping them make some of their own will put them on a path to financial wellbeing. Want to learn more about opening an account for your child? Book an appointment.
For more valuable tools to help teach your child or teen about financial literacy, visit our website.
*Minors require parental consent to access online banking.