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January 08, 2018 | By: Kerri Barreca

How to Teach Kids about Money

Kids and Money

People joke about having to learn quadratic equations and the Pythagorean theorem in high school, but never actually needing that kind of knowledge for real life. So unless you plan on being a mathematician for the national space agency, phrases like “a squared plus b squared equals c squared” aren’t likely to pop up again until a pub trivia night. Meanwhile, more practical financial skills and knowledge — like learning how to file a personal income tax report, understanding the true cost of credit, and how to develop and follow a monthly budget — typically seem to fall by the wayside.

Teaching kids about money is important. I was lucky enough to have learned financial literacy basics from my father. He is the one who sat me down with a pencil, eraser, calculator and my first T4 slip to understand tax forms. I am happy to report that this exercise did not end in tears (unlike my first driving lesson from my father). To this day, I still do my own taxes by hand. It was taught to me in a clear, understandable way that I was able to repeat on my own. However, knowing that not every child is lucky enough to be exposed to these skills at home, it is extra important to have the opportunity to learn them in the classroom.

When I was in grade 8, I was left behind during a week-long school trip to Quebec City. My parents couldn’t afford to send me and I understood that. Funnily enough, the extra subject we learned while 95% of the class was absent was — you guessed it — personal finances! We practiced writing cheques, balancing a cheque book, learning currency conversion, etc. Why none of these necessary life skills was mandatory for every student to learn is a mystery to me, as it all made a huge impact; I even recall getting the chance to decorate a cake with a money theme on the last day (although I think the teacher just felt sorry for the poor kids so she cheered us up with baked goods).

The bottom line is that it is so very important to start young when teaching financial literacy. Canadian teens were recently ranked third globally, after China and Belgium, among financial literacy ratings, and it’s noteworthy to mention that there was no significant gender difference in this young group (as opposed to their adult counterparts). These results show great promise for the next generation. For parents or teachers looking for some extra money educational activities and resources, here are a few you may wish to use:

Consider giving your child a modest weekly allowance. A weekly or monthly allowance for kids can serve as a great opportunity for them to start learning the value of a dollar and to practice the concept of saving for a future goal. Help them make the difficult choice between splurging on a chocolate bar today or saving their coins for a few weeks to get that special toy instead. You can use these activities as money management games to engage and motivate them to learn. Have them start by looking at the prices of different products at the grocery store when you shop together; allow them to help you make the decision about which peanut butter or juice to purchase using their newfound money management skills.

So there you have it. It’s crystal clear: In order to prepare our youth for the stress and confusion that often comes with money, let’s start by teaching them the knowledge and skills they need early on. From my experience, it’s never too early to teach financial literacy.

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