After a few weeks on the island, my parents are heading back East today and we’re hitting the road to Victoria pretty quick this morning.
We’ve all had such a great time just hanging out and soaking up being a family, it’s a bit of a blue day around here.
So, I thought I’d pull out an oldie but goody.
Way back in June, the warm and wonderful Lara Austin over at RBC Dominion Securities asked me to write a piece on youth financial literacy for her monthly newsletter. It was a great opportunity that I’m very grateful for. So, I wanted to share the article with you now as I think most of us tend to hope our kiddos will be smarter with their loonies and toonies in their younger days than we were.
Here it is:
Are you starting to think it’s time to have “the talk” with your kiddo? You know, the one where you cringe at having to go into all of that personal, private detail about how to manage finances?
When you look into your 5-, 10- or 16-year-olds eyes, money isn’t generally the first thing that crosses your mind when you think about the tough talks headed your way.
But, that talk and the follow-up process of providing young people with the tools to become financially literate is one of the most important talks the two of you will ever have. By the time your child is 18, they will more than likely have at least one credit card and be busy racking up debt. So, getting going early is key.
You don’t have to be a financial wizard to teach your child the ins and outs of financial literacy. All you need is the willingness to put in some solid one-on-one time guiding them through the basics of managing money, and then offering tools for them to help money work for them.
Here are some tips straight from the mouths of noted financial advisers and parents around the globe to help you begin the process:
1. Start simple. Open a savings account for your tiny person (you can start them as young as 5) and set some money saving goals together to help them understand the process of how money accumulates and how putting even a dime or a quarter a day away can allow for them to buy something special over time.
2. Teach patients. Anyone who has lived with a toddler understands the theory of “now or never.” But, instant gratification is the biggest no-no when it comes to teaching a child financial responsibility. Children who understand and apply self-restraint when it comes to saving money – for something like a bike or skates – are often more apt to be less impulsive in all aspects of their lives as they grow older.
3. Work together to show to the process of and differences in Saving, Spending, Donating and Investing by using these four concepts as you go about your daily life. You can set up a house financial plan that has budgets for things like groceries, clothes and goodies. Then, take your kiddos shopping and work through the process of meeting that budget while completing a food list by comparison shopping, reading the newspaper ads and looking for sales.
If you read through these and are now thinking, “That’s really great. But, I need a hand to guide ME through the process,” I’m right there with you and have discovered some rather priceless guidebooks that make teaching financial literacy something anyone can handle.
Money Savvy Generation is first-rate in terms of how-tos, advice from money professionals as well as parents and even an on-line store. I particularly love the Money Savvy pig that gets kids off to a great start at a young age. But, whatever age your kiddos are, this site has the tools.
MSG and several other organizations also offer parenting software and Internet resources that lay out several ways of going about teaching financial literacy in your home. These tools not only aid in your organization and planning, they can give the whole family a chance to bond over the bank book – something that usually is more likely to be a source of disconnect.
Who said the piggy bank has gone the way of the dodo?