(NC) The holidays are a perfect time of year to educate your kids about money. Whether you take them gift shopping or they receive cash as a present, children of any age can benefit from learning money management skills.
“Financial literacy is an essential life skill, just like reading and writing,” explains Jane Rooney, Canada's Financial Literacy Leader.
When children are young, parents can begin with basic concepts such as counting and recognizing coins and bills. Then, they can add discussions about needs versus wants, budgeting, and income and expenses. Teachable moments are everywhere — talk about your spending plans when visiting stores or taking out cash from an automated banking machine.
When talking about saving money with children, discuss goals that appeal to them. For example, saving money for a video game or a special activity. As children get older, discuss saving for longer-term goals, such as post-secondary education. A savings account is another great tool to teach them how to save, with many financial institutions offering no-fee accounts for children and youth.
There's an advantage to getting a head start. According to the Programme for International Student Assessment, Canadian youth with experience handling their own money demonstrate stronger financial literacy skills.
Not all families and all financial situations are the same, but the Financial Consumer Agency of Canada is a great resource for trusted, unbiased information for a variety of circumstances. Explore the Canadian Financial Literacy Database for events in your community and learn more online at canada.ca/it-pays-to-know.