October 01, 2013 | By: Laurie Campbell

Kids and money: The parent as financial coach.

In matters of kids and money, I’d say saving and spending habits are as unique as each child. Take my teenage son and daughter, for instance. I’ve trained them similarly about personal money management from their earliest years, starting with simple basics about the value of money when they were little, to more elaborate discussions about credit, debt, and personal budgeting as their conceptual abilities grew. Although they’ve received the same financial coaching from me, their attitudes and approach towards money are quite different. My son is a very generous type. He frequently makes small loans to friends then has a hard time keeping track of who owes him what. Fact is, he makes little effort to keep an account of his lending. On top of that, he’s no stickler about getting paid back. He’d rather let the loan slide than make an issue of it, perhaps making him either a saint or a sucker in the eyes of his peers. On the other hand, my daughter is tight with her money and rarely apt to loan anyone any amount. Moreover, even when she has her own adequate store of cash, she often approaches “The Bank of Mom” for more funding. She calls it “preserving her cash flow.” I call it a snow job. Now, don’t get me wrong, I’m not talking about a crisis state concerning either of my kids. I don’t wish to create the impression that they have gone off the rails financially. After all, the sums I’m talking about are far from astronomical. Truth is, my son and daughter are smart kids and good kids for the most part (I did mention they are teenagers, right?). They’ve still got plenty to learn about personal finance – a whole lifetime of learning in fact – and I’ve still got lots of work cut out for me as their financial coach. But being aware of how my kids treat money makes my work easier. On the plus side, whatever their apparent shortcomings, my kids both share a keen interest in how money works, the importance of cash flow, and the cost of borrowing. This is very encouraging to me as a mom. There was a time, not so long ago, when dialogue about financial literacy between kids and parents was pretty limited. Moreover, little thought was given to school-based financial literacy programs, which today are moving forward in Canada. A generation ago, kids simply learned about money by watching the example set by adults – and in many cases that example was far from ideal. One signal of our changing times came just this past summer. An ING Direct survey showed that among kids in Canada aged 11 to 14, more than a third of youngsters are eager to learn more about how credit cards work, what things cost and why. And just about as many want to know how to save money and manage a personal budget. As I say, that’s a far cry from most in my generation, who when we were kids didn’t give much thought to money aside from how much we could spend. What we know through credit counselling here at Credit Canada is that curiosity about money – and openly sharing financial information and knowledge - is healthy for all family members at all times. Teaching children to live within their means, set savings goals, and spend wisely is as important to education as any subject supporting life skills. After all, financial literacy affords kids wisdom for practical application every day of their lives. That a third of kids are interested in the specific ways money works ought to be welcome news for all of us in Canada who are actively engaged in promoting and strengthening financial literacy programs. Yet it’s clear we still have a long way to go to get more kids across the land on track to being money smart. Imagine if Canada could boast of having the most financially literate kids in the world? It would only add to the country’s current reputation for having one of the best banking systems and soundest economies on the planet. Programs dedicated to smart personal money management are only now being added to school curricula. Which means parents continue to play a preeminent role in teaching their kids about subjects such as managing a personal monthly budget, tracking spending, and taking steps to save in the context of short term, mid-term, and long-term goals. For parents seeking step-by-step tools to help teach kids about money, I would recommend starting with a book entitled Money Savvy Kids, authored by personal finance expert Gordon Pape and his daughter, Deborah Kerbel. The book offers financial lessons applicable to youngsters from age five to 17, with the father-daughter team taking a fun approach to the learning process. As well, the two provide plenty of information about online resources and books for thoughtful parents. In terms of the best financial coaching for kids, parents need to practice what they preach because that’s what children absorb most. Meanwhile, parents have to be aware of their own limitations regarding what they know about money and its many ins and outs. Parents should be confident about their knowledge of personal finance before sermonizing from on high. At the very least, basics relating to budgeting, goal setting, and credit management should be understood by all givers of financial advice. Beyond these matters, parents can turn themselves into financial wizards by taking advantage of financial literacy programs such as Credit Canada’s Financial Coaching Series. For a reasonable fee you can become an expert in personal financial management. No matter how much or how little you make as a working person, you can budget, save, and invest money like a pro – and set a great example for your kids. I look at it this way: “The Bank of Mom” also provides educational services.


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