Disclosure: This post was sponsored by TD but, as always, all opinions are my own.
Growing up, my grandma loved spoiling her children and grandchildren at Christmas. She would always ensure there were beautifully wrapped gifts under the tree and envelopes so we could buy what we truly wanted. I remember one year, she gave my sister and I a duffel bag for overnight trips and lined on the bottom were crispy Canadian dollar bills. Dollar signs formed in our eyes and I’m sure that money was spent before it was even counted!
How would your children react if they were given money for Christmas or any other holiday? Would it burn holes in their pockets the next time they were at a shopping mall? Would it be spent on the newest, must-have toy? Or would it be saved in a bank account or piggy bank, until they had reached a preconceived goal and only then allow themselves to splurge?
For some families, money is still considered a taboo topic. It is estimated that 1/3 (33 per cent) of Canadian parents first talked to their children about money management before the age of 10, and 1/4 (25 per cent) first talked to their children between the ages of 10 and 15 years old. (State of Financial Education in Canada)! Developing healthy money management habits at an early age can help set a child up for a more secure financial future. The following tips from TD can help you start talking about money with your kids, regardless of their age.
Under 6 years old: Under 6 years old, children are just beginning to learn about the world of money. They need to understand the different shapes, colours and textures that money offers. They don’t understand that 5 pennies is worth less than 1 loonie, they only see the value in the quantity they are presented. At this stage, your primary focus is to introduce the concept of money and teach them how to sort money and create the same amounts from different coins.
My favourite way is the Muffin Tin game:
6 to 9 years old: Around 6-9 years old is when children begin to associate with money more often. It may be as a gift at a special occasion or it may be in the form of an allowance. At this age, they begin to understand the concept of saving money (watching their piggy bank fill), but they don’t understand the relationship between saving and spending. For example, one weeks of chores may present you with $5 but that won’t pay for the latest and greatest toys they want. Saving and spending concepts be reinforced at this age.
My favourite way is Graph charts:
10 to 15 years old: If you started at a young age, your child should now have the basic grasp of money. Now it is time to expand that knowledge with their own their bank account (making deposits,withdrawals, and using a debit card). This concept takes some work as a plastic card with no running balance can feel like free money. Teaching your child to balance their account with a spreed sheet and setting financial goals (i.e. savings for school) should be introduced.
My favourite tips are from TD’s Financially Fit website:
16 to 18 years old: At this age, your child should take on a more financial independence. As they start earning more money through a part-time or summer job, they should have more responsibility to pay for regular bills, such as monthly mobile payments, and saving for bigger purchases, such as a car. The best way to explain this to your child is show them the family’s finances. Teach them about the hidden costs of owning a home and car, as well as the importance for saving for unforeseeable circumstances.
My favourite way is with Tracking sheet:
For more great resources on ways to talk and teach your children about money, I suggest you visit TD’s Financially Fit website that offers advice to help parents have conversations with their children about smart money management practices.