It’s never too early to teach your children about finances.

2023 / 04 / 26

One of the largest goals of being a parent is setting your children up to learn the life skills they need to succeed. This can start at an early age by teaching your children to eat, crawl, and walk, and as they get older, you help teach them to read and write, to ride a bike, and someday how to drive a car. One thing that can be taught continuously as children grow is personal finances. By taking the time to teach your children about finances, they will be able to make good decisions about spending, save for the future, create good financial habits, learn about credit, and learn the difference between needs and wants. This can set them up to have a good financial structure that can have a profound effect on the financial decisions they make as adults.

Below are some easy ways to help to incorporate financial lessons in your child’s life:

1. Keep it fun – To capture the attention of a young child, ensure any lessons about finances are engaging and fun. Children as young as three can start to learn about money through fun games such as setting up a pretend store or restaurant, and having your child use play money to make purchases.

2. Lead by example – Children are incredibly observant and will learn just by watching. It’s important to model good financial habits and involve your children in the process. For example, when taking your child grocery shopping, talk to them about why you chose the cheaper item over the more expensive one, or involve them in keeping a running tally of what the grocery order may cost, and what’s left of the budget after you pay. By using real life experiences, your child can see the value the money and how it is used in everyday life.

3. Give an allowance –A young child is capable of small chores, such as picking up their toys, feeding the animals, and more. It teaches them not only responsibility, but the satisfaction of hard-earned money. Giving an age-appropriate allowance can teach children about earning money, budgeting, and saving. By taking the time to have a discussion with them, you can encourage the child to really think about what they would like to do with their money and come up with a plan with them to achieve their goals.

4. Give the opportunity to earn extra money – As mentioned above, kids can easily earn an age-appropriate allowance by completing basic chores. When a child has identified an item they want to save for and have been working hard to do so, offer the chance to take on extra chores to earn some extra money. This will help instill a good work ethic and allow them to have a bit more control over reaching their goals.

5. Teach them about opportunity cost – By simple definition, opportunity cost is what you have to give up to be able to buy what you want in terms of goods or services. For example, if your child wants to purchase both a video game and a new skateboard, but only have the money for one, there is an opportunity cost. They need to learn to weigh their options, and understand the outcomes to be able to make the best decision for themselves.

These are just a few ways to help teach younger children about finances. As your child grows, it opens the door for more advanced ways to approach personal finances and help set them up for success. As children gain a more in-depth understanding of personal finances, you can include them in the monthly budgeting process so they can understand what comes in monthly to the household for income, and what it costs to run a household. With a simple Google search, there are many age-appropriate ways to incorporate personal finance lessons in your everyday life.

If debt is holding you back from being able to successfully incorporate personal finance lessons in your day-to-day life, there are options that can help you get on track.

If you are looking for advice, or a second opinion about your debt, it does not cost anything to talk about your options. Every financial situation is unique and viable options can differ from person to person. A conversation free of judgment and cost, is the first step to determine options for debt that make sense for you. For a free consultation, please call or text (506) 645-1814 or email jaime@tackledebt.ca; or visit www.tackledebt.ca.