Start good habits early
November 19, 2018
By Jane Rooney, Canada’s Financial Literacy Leader
Welcome to the fourth week of Financial Literacy Month!
All month, we’ve been talking about investing in your financial well-being. This week, we’re talking about what that means for children and youth, as well as their parents and caregivers.
Start good habits early!
As a mother of two boys who are now in post-secondary school, I know how important it is to talk to children about money early on to help them achieve their financial goals and start on the path to financial well-being.
Financial literacy is an essential life skill, and you can never be too young to learn some of the basics. As children grow, they can learn how to plan and save for the future, and protect themselves as financial consumers.
So where do you begin? I encourage parents to start the conversation as soon as their children can count. You can then build on their knowledge and shape positive behaviours as they grow.
This way, children will learn how to:
- Make good decisions about spending
- Understand the difference between needs and wants
- Save for the future and for emergencies
- Practice good financial habits and
- Use credit responsibly
Parents can make learning about money part of everyday life. For example, when you’re out shopping or running errands, you can talk to your children about how you decide what products to buy, and why.
When talking to children about saving, discuss goals that appeal to them. For example, they could save for a video game or a special activity. You can teach them to prioritize, talk about how to save and help them set goals. You can also explain the benefits of putting money aside and earning compound interest.
Many people learn by doing. That’s why it’s important to use all of these teachable moments.
In fact, recent research shows us that talking about money at home and learning hands-on how to manage your finances improves your financial literacy.
As this is Education Savings Week, I also want to encourage parents and caregivers to consider a Registered Education Savings Plan (RESP) to save for your child’s post-secondary education. Anyone can open one: a parent, grandparent, relative or family friend.
Money in an RESP can be used to help pay for full-time or part-time studies in an apprenticeship program, trade school, college or university. An RESP is the only savings account that allows you to be considered for education savings incentives, such as the Canada Learning Bond and the Canada Education Savings Grant, which means free money from the government. You can read about RESPs, education savings incentives and more on the Education Funding page.
It’s important to start early when planning and saving for post-secondary education. The more money students save before going to university or college, the less they’ll have to borrow.
Whether you are a parent or caregiver helping your child learn about money, a teenager starting to work and save, or a post-secondary student planning your finances, financial literacy is an essential life skill.
Start the conversation early, and build on skills, like creating and using a budget. Getting a head-start gives children and youth the knowledge, skills and confidence to make informed financial decisions throughout their lives.
Visit our Financial Literacy Month website and follow us on social media to learn more.
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