Teach children about money
November 20, 2017
By Jane Rooney, Canada’s Financial Literacy Leader
It’s the fourth week of Financial Literacy Month! Thank you for following along!
This week’s theme is one I could spend a lot of time talking about because it’s so important: Teaching children about money.
We know from our research that it’s critical to teach children financial literacy early and often.
Financial literacy is an essential life skill. Teaching children how to manage money will help them throughout their lives.
According to research from the Consumer Financial Protection Bureau in the U.S., it’s really important to help young people learn the concept of delayed gratification and self-control even before introducing money. Giving children frequent opportunities to practice this, for example by putting money aside for toys they want, allows them to develop healthy habits early on.
One of the best places to learn about money is at home. Maybe it’s a conversation around the dinner table, or while grocery shopping, or when it comes time to making holiday wish lists. There are teachable moments everywhere. A good starting point can be as simple as talking about things children want versus what they need. This can lead to other conversations about spending, how much things cost, prioritizing, saving, and making informed choices. Some children may think their parents have unlimited money. Telling them about where money comes from, or taking them to the ATM, and explaining how debit cards work, are great ways to teach them about money.
As children become teenagers, there are many opportunities to keep the conversation going, from earning their first paycheque for a part-time job, to paying cell phone bills and saving for post-secondary education, to helping them do their taxes for the first time.
Not only is this Teach children about money week, it’s also Canada Education Savings Week. This is a great time to share information with older children and teens about saving for post-secondary education. Many organizations and financial institutions are working together to raise public awareness of parents and kids about the various government incentives available to them simply by opening Registered Education Savings Plans (RESPs) and also about the free money that’s available through scholarships, grants and bursaries.
We know young people want to learn about money from trusted adults, including parents and teachers. They see the value of learning these important skills that will set them up for success.
Learning about financial literacy should be positive, fun and engaging! There are a lot of great apps and tools to help parents and teachers engage young people and make financial literacy a fun experience.
Not everyone is comfortable talking about money, but the Financial Consumer Agency of Canada is helping through its online tools and resources. There are also great resources through our Teaching children about money page, and our Canadian Financial Literacy Database, which is a one-stop hub for programs and activities, many of them geared towards children and youth.
So how financially literate are our young people? When it comes to financial literacy, Canadian youth are among the best in the world. That encouraging finding is the result of the first-ever Canadian participation in a global survey of financial literacy among 15-year-olds.
Canada came second among 15 countries – tied with Belgium – in the Programme for International Student Assessment (PISA) financial literacy survey administered by the Organisation for Economic Cooperation and Development (OECD) in 2015.
Canadian students who talked about money with parents tended to score higher, with those discussing money matters at home once or twice a week ranking the highest.
The PISA study also found that youth with experience handling their own money had stronger financial literacy skills. We learn by doing. Canadian students who held occasional jobs as well as those who regularly saved some money had the highest financial literacy scores. We know most Canadian teenagers hold bank accounts, and this helps them gain experience with financial products and services.
Many schools across the country are teaching children financial literacy as part of the curriculum. So are many parents. This is wonderful and we want to continue on this positive path. We are seeing the results!
Our children are the future, and a financially literate population is good for our economy.
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