As a parent, you must teach your children tons of things. Of course, money is part of it. Unfortunately, the subject is taboo in many homes, particularly in Quebec. It’s up to you, as a parent, to break it down.
Ian Sénéchal co-authored the book D’Endetté à Millionnaire. Click on the link to buy your copy.
AS EARLY AS CHILDHOOD
Here is a financial education strategy that I personally used with my two boys. When they reached the age of six, I started giving them $5 a week with no strings attached to doing housework. Your children start learning arithmetic in Grade 1, so around their sixth birthday. This strategy allows them to be a step ahead of their classmates in math, but most importantly, to better understand the value of money. If your child wants to buy an $80 toy, they will learn that they have to save for 16 weeks and that it’s a long time!
It’s important to learn about the freedom that money provides in life. By the time your children are about 12 years old, you can stop giving them pocket money without them making any effort. Now they can work. If they want money, they must earn it. Give them various jobs to do at home, paying them around $5 an hour. If they want more money, they will have to find a job outside the home. At that age, it’s possible to scorekeep or officiate in certain sports, or to babysit young children who live in the neighbourhood. It’s time for them to learn to be reliable and hard-working.
ONCE THEY LEAVE HOME
Lucky you, you don’t still have an adult child living under your roof. Your child needs to leave home to study. However, it’s time to have a serious discussion with them about finances. Ask them to make a budget. Ideally, they should prepare the first draft on their own. During your first review, don’t comment on the amounts,just make sure that they have not forgotten certain categories of expenses. Next, adjust the amounts with them. For example, why spend $70 a month on their cell phone? Do they need that much mobile data? Finally, negotiate how much money you will pay to help them. If they think that it’s not enough, they will have to trim their budget or work a little more. In short, teach them real life!
• Teach your child the value of money first. To do so, use pocket money starting from a young age.
• Then, teach them the importance of working hard to acquire it. Money is freedom. However, freedom must be earned.
• Adolescence is the best time for them to learn this life lesson.
• Finally, teach them about planning for and managing expenses. With this skill acquired, they will be an adult – financially speaking!