In many households, money remains a taboo subject, often leading to financial literacy gaps that can follow children into adulthood. As we mentioned in “Couples and money”, four in ten Canadians report that money issues cause stress in their relationships, making it clear that establishing healthy financial habits early is essential. Whether you have toddlers or teenagers, here’s how you can help your kids develop a healthy relationship with money at every stage.
For the little ones (ages 3-10)
Start with wants versus needs conversations: Even toddlers can begin to understand that money is finite and choices must be made. When your child wants a toy at the store, use it as an opportunity to explain the difference between necessities and desires.
Introduce saving with a piggy bank: A simple piggy bank can be a powerful visual tool for young children. Encourage them to save money they receive from relatives or small allowances, helping them see how small amounts accumulate over time.
Use games and stories: Board games like Monopoly Jr. and age-appropriate books about money can make financial concepts approachable and fun. These tools help normalize money conversations at home.
Model generosity: Teaching kids to share and be generous from an early age helps them understand that money isn’t just for keeping or spending on themselves. This foundation will serve them well when they’re older and considering charitable giving.
For pre-teens and teenagers (ages 11-17)
Open a bank account: Moving from a piggy bank to a real bank account is a significant milestone. Help your teen set up their first account and explain how banking works, including interest and account fees.
Create a simple budget: When teens get their first part-time job or regular allowance, sit down together to create a basic budget. Help them allocate portions for spending, saving, and perhaps giving.
Discuss family finances (selectively): While you don’t need to share every detail of your household finances, discussing general concepts like inflation, the cost of living, or how you budget for family expenses can be valuable lessons.
Introduce the concept of credit: Before they head off to college or university, ensure teens understand how credit works, including credit cards, interest rates, and the importance of maintaining good credit.
For young adults (18 and over)
Bring them to meet with your advisor: Many of our clients introduce their children to us once they’re eligible to open a TFSA (around age 18) or earlier. This helps establish professional financial guidance as a normal part of adult life.
Discuss education and housing savings: Talk about options like RESPs, TFSAs, and the First Home Savings Account (FHSA) to help them prepare for major life expenses.
Create a safe space for financial mistakes: Young adults will make money mistakes. Establish an open, non-judgmental environment where they feel comfortable discussing financial challenges before small issues become major problems.
Tips for successful financial conversations at any age:
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Be consistent: Financial education isn’t a one-time discussion but an ongoing conversation that evolves as your children grow.
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Practice what you preach: Children learn by example, so demonstrate good financial habits in your daily life.
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Use real-life situations: Grocery shopping, planning family vacations, or even paying bills can become teachable moments.
By early to mid-teens, your child should have established respect and value for money, understanding how practicing good choices creates a successful roadmap for long-term financial freedom and happiness. These early lessons form the foundation for responsible financial management throughout adulthood.
Need personalized advice on teaching your children about finances? Reach out to us anytime — we’re always here to help.