We remind our kids to mind their manners, but what about their money? We’ve got some tips to help develop your kids into mindful millionaires. Or at least teach them to save their allowance.
Start early, start small.
Money management is an important skill that kids can start learning at any age. An allowance is a great way to teach your kids the value of money. It’s your call how they earn it, when to start and how much, and how often. Depending on the age of your child, you could structure it so your child spends some of their own money on things like clothing, entertainment and gifts for their friends’ birthdays.
Set them up with a bank account.
With the help of your financial institution, teach your child about interest, the difference between chequing and savings accounts and how to use a debit card.
A budget is a budget.
It might look a little different from yours (you probably don’t have a line for candy purchases) but a good budget is the foundation of good money management at any age. A child’s budget could include money for treats, gifts, vacation spending, clothes, toys, and of course, savings. This is a good time to teach your child the difference between a “want” and a “need.” Use our customizable budget calculator.
Teach them about spending within their means.
With Canadian household debt at an all-time high, explain to your kids now that while a credit card is a convenience, it’s not actually your money. You have to pay back what you spend. If you have an older teen, they can get a student credit card with a low limit of just a couple hundred dollars. This is a good resource for learning how to use a credit card and keep the balance manageable so they can pay it off each month.
Teaching your children financial literacy skills now will set them up for success in the future.