RAISING MONEY-SMART CHILDREN
Parents should use the March break to teach important lessons in personal finance, author says
Talking about your finances may not seem like a fun way to spend March break, but experts agree the sooner children learn about money, the more financially savvy they will be as adults.
Teaching children about money doesn’t mean pulling out every financial guide and giving a school lesson. Robin Taub, chartered accountant, mother of two and bestselling author of A Parent’s Guide to Raising Money-Smart Kids, says the best way to teach children about money is to find “teachable moments” — opportunities for money discussions that crop up in daily life. She suggests looking for these opportunities while you’re out and about during the March break.
PASS THE BUCK
Involving children in the payment process is a great way to introduce them to money. Taub says as soon as youngsters can count, they can start learning about money. Make the payment process childfriendly by asking little ones to hand the cashier the money and collect and count the change. If you’re using a credit card, show them how to insert the chip, punch in the pin and explain what happens when the bill comes.
Showing teens the bill and highlighting the things you bought with them is a great way to educate them about how credit cards work and what the repercussions are when you don’t pay the bill. “They need to understand that because by the time they’re in university, they can get their own card in their own name and (can make some costly mistakes) if they don’t know how it works,” says Taub.
MAKE A MARCH BREAK PLAN
While crafting a budget may seem boring, making a March break activity plan is a great way to get the whole family involved and excited about the process. “Any outing is an opportunity to talk about budgeting,” says Taub. Discuss the costs associated with each activity, including admission fees, parking costs, lunch or snack expenses and research student discounts and whether you can score some online coupons.
Going on vacation outside the country is also a great opportunity to talk about money and introduce children to the concept of foreign exchange. Allow them to feel the money and calculate the cost of the things you buy while you’re away in Canadian dollars to give them context.
MODIFY ALLOWANCE
Taub says an allowance is a great tool to begin teaching children about money and give them some control over their spending habits. “Even when they’re young, it’s nice for them to have a sense of their own money and decide if they want to save, share, spend or invest,” says Taub. While $10 a week may be enough to get by on while they’re in school, March break will require an adjusted budget, especially for preteens and teens who want to go out with friends. “Their routine is going to be different for that week,” says Taub. Discuss how much money they’ll need, set a budget and be firm about it. “If you plan it out, maybe two movies this week and one trip to the mall, and you both agree to it, it’s really important that everyone sticks to it,” says Taub.
KEEP TRACK OF MARCH BREAK SPENDING
Keep track of your spending throughout the week and compare it to your budget. Many free apps such as Mint.com, PocketMoney Lite and Cashish are fun and easy ways to show you where your money is going. Save your budget for next year so you can discuss what worked and didn’t work and make modifications.
A Parent’s Guide to Raising Money-Smart Kids is available exclusively at castore.ca/moneysmartkids