I vividly recall when I was younger hearing my father say “one day you will understand” after throwing a fit because I couldn’t get the toy I wanted.
Although my parents went on to teach us the value of money I feel learning about other aspects of finance would have been beneficial although some were not around such as the TFSA or RESP.
Some examples of what you could educate your children about;
- 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? Why people go into debt?
- Saving for Education- Not all parents open RESP’s so teaching children about saving for school is imperative.
- Bank accounts- types of accounts, set up a meeting with the bank professionals if needed to explain.
- 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? Perks and Points Available.
- TFSA- What is a TFSA and when can they start putting money away?
- Temptation- The Difference between a “Need” and a “Want”
I could go on and on but the reality is children need to know this information. The toolbox of life should include finances along with love and education
An allowance is great as long as there is responsibility that comes along with the payment. Simply handing over $15.00 a week to clean their room but you never check it is not teaching them anything.
My first job was a paper-boy and I can honestly admit I had no idea what I was doing with money. I knew my parents made deposits at the bank so since we lived close I wandered inside. It was from that point forward that I opened a bank account to deposit my collections to pay the monthly paper bill.
I bet the tellers must have thought I was a child with bank account OCD. I was in the bank almost everyday, I was fascinated with money. I loved seeing my bank account grow even if it meant depositing $1.00.
I asked questions each time I was at the teller and I learned from the professionals at the ripe age of 12. I went on from there to continue my savings into adulthood with a knowledge I can never put a price on.
Not every child will be like me so I feel it’s up to the parents to take the bull by the horns and teach children young. You aren’t going to cause them any harm, they may thank you one day.
If you as a parent do not feel you are educated enough there are hundreds if not thousands of financial experts at banks or other organizations just waiting to help you. Make the call!
As the saying goes “I wish I knew then what I know now” would have given me a deeper foundation for the future. To allow your children the opportunity to say “I remember my parents saying something about RRSP’s” is better than not knowing about them at all.
You can read some other great tips in this guest post I wrote for Money Smart Mom about Teaching Children about Money.
What have you taught your children about Money?
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- How to save when surplus cash is low (theglobeandmail.com)