A Brief Discussion: Children and Money

by Jeffery A. Keill, CFP, CIM, FMA, FCSI, Portfolio Manager and Senior Wealth Advisor Keill & Associates- Advisory Team

If you have ever been a parent, you can appreciate wanting great outcomes for your children. We hope to help them grow in many aspects of life such as, learning from your successes and avoiding making the mistakes you made. Often times, these skills are around financial decisions and choices about money. Teaching children about money is an essential part of their education and upbringing. Money-wise children gradually become equipped to understand today’s society of the generations before us, it was important to teach skills such as animal husbandry and farming. In our monetary society today, financial literacy skills are the crucial skill for future financial well-being. This Discussion Paper provides some concepts that our Team wants to share on how to teach your children about money, from early childhood to adolescence and beyond.

Start Teaching Your Children About Money Early

Basic Concepts

• Start at a relatively young age such as pre school. The idea is to make it fun and interactive.

• Introduce basic concepts like counting, saving, and spending.

• Use tangible objects like coins and play money to make learning fun.

Make Vocabulary

• Teach your children the names of different coins and bills.

• Explain their values and uses

Developing a Financial Foundation

Allowances

• Consider giving your child a regular allowance, which can serve as a practical lesson on budgeting.

• Discuss saving, spending, and sharing of their allowance.

• Discuss the idea of choice and outcome

Savings Accounts

• Open a savings account for your child and involve them in the process.

• Encourage them to deposit a portion of their allowance or gift money regularly. This will pay off when it comes to the idea of Pay Yourself First, when they begin to work.

Goal Setting

• Help your child set achievable savings goals.

• Discuss the importance of saving for something they want.

Money Management

Budgeting

• Teach your child the basics of budgeting. Work with them to divide their allowance or earnings into three basic categories like spending, saving and sharing. Many parents often overlook the idea of charity at a young age.

• Make sure to write it down. Use a very simple budget worksheet to illustrate this. Basic financial skills will be effectively retained through visual aid and can be referenced at any time.

Spending Wisely

• Encourage your child to make thoughtful spending decisions.

• Discuss the difference between needs and wants

• Discuss the idea of immediate and delayed gratification, even though your child’s view of long term is probably next week.

Saving

• Emphasize the benefits of saving money for future goals or emergencies.

• Consider offering matching contributions to their savings.

Sharing and Giving

• Teach the value of generosity by allowing your child to allocate even a small portion of their earnings to a charity of their choice.

• Engage and discuss philanthropic activities as a family. Let them see your own activity.

Real World Experiences

Shopping Trips

• Bring your child along when shopping, explaining price comparisons and the concept of sales and discounts.

Bank Visits

• Take your child to the bank to deposit money and show them how interest works in a savings account.

Engage Your Family's Wealth Advisor

• Don’t be afraid to ask your family’s Wealth Advisor to help explain things at various ages. Most Wealth Advisors are not equipped in explaining financial concepts: they truly do enjoy helping.

Digital and Online Money

Online Banking

• Teach your child about online banking and digital payment methods.

• Emphasize the importance of online safety, privacy and personal image sharing.

Financial Education Resources

Books and Games

• Turn off the household wifi and encourage family time around board games that teach financial concepts. Monopoly or the Game of Life are great opportunities to keep a money conversation going.

• Explore the plethora of great books available on personal finance for all ages. Talk to your family Wealth Advisor to get some great options, or to see if they have any available you could borrow. Also consider your local library.

Financial Literacy Programs

• Junior Achievers Canada is a great resource for financial literacy. Encourage your children’s school to engage in this organization, as the speakers and content provide excellent learning opportunities for those pre-teen and teenage years.

In Conclusion

As parents ourselves, we completely understand that teaching children about money requires patience, consistency and commitment. By starting early and gradually introducing financial concepts, children can develop the skills and habits needed to take the world on when you are not always available. These lessons will serve them as well as they leave home, attend post-secondary and enter their careers, and possibly start a family of their own, They will become what many parents desire: financially responsible adults equipped to make informed financial decisions and achieve their life goals.

Disclaimer and Notice to Reader: This Discussion Paper should not be construed as legal or tax advice but rather only as a general statement and explanation of the topic matter. Professional tax and legal advice should be obtained for the readers own personal situation. For more information on this topic or how it applies to your family, please contact our Wealth Advisory team.

Last Edit Feb 11, 2025