The Ontario government recently introduced financial literacy to the school curriculum. Many kids enter university and the real world without acquiring any knowledge of banking accounts, budgeting, investments, and how credit works. Perhaps their parents and caregivers weren’t the best financial role models or they just figured their kids would pick up financial tips on their own someday.
As part of the curriculum, students will have lessons about earning, spending, saving, donating, credit, and debt. They’ll also learn about paying off a mortgage, calculating interest rates, exchange rates, setting financial goals, and so on.
In the primary grades, a common math problem is calculating whether they have enough money to afford three or more items of varying prices. Some problems also ask the student to calculate how much they would have left over if they made a purchase.
Learning by doing is the best teacher. Kids need some money of their own to best learn how to manage it.
When helping their kids with homework, parents could expand those themes. Ask your child what they would do with the leftover money. The answer may be simple (“spend it all on candy”), but this reply can lead to a discussion on goals for our money, needs versus wants, and delayed gratification. For example, can your kid come up with other solutions for the extra cash beyond making a purchase?
Learning by doing is the best teacher. Kids need some money of their own to best learn how to manage it. Let them make their own buying decisions and learn by trial and error whether their purchases were worth the cost or best to skip next time. You can start by giving them a weekly allowance either on its own or for doing chores and household errands. Some families follow a spend/share/save model that allows kids to buy what they want now, donate to a charity of their choice, and save up for a bigger-ticket item.
Work with your kids to develop their own plans for their money. Advocis, The Financial Advisors Association of Canada, recently created the Junior Financial Advisor (jFA) Fin Lit Kit, a kids’ activity book, to spark detailed money conversations. Younger kids will be happy with the word searches and colouring sheets, while older kids can think some more about how to make their financial goals a reality.
But teaching moments are everywhere. While shopping at the mall, younger kids may observe you using a credit or debit card and come to the conclusion that you get money from simply tapping a card. That can lead to a chat on where money really comes from, how it’s earned, and how you qualify for credit.
Kids can also learn about money on the platforms they love best. If your kid avidly uses Roblox, show them the jFA Financial Quiz & Obby, a financial literacy game. It was amazing to see my eight-year-old’s avatar navigate through this game’s mazes. And for her to advance to the next level, she needed to correctly answer multiple-choice questions about money. I thought she would be stumped by one question on credit cards and how to avoid interest charges, but she picked the correct answer about paying off the bill every month. What made her select that answer? “It’s just obvious,” she shrugged, as she recalled me talking about paying bills.
Hopefully, it’s an answer she’ll remember when she has her own credit card someday.