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How to Teach Kids About Money


Teaching your kids about saving and spending from an early age gives them essential life skills. The more conversations about budgeting and setting financial goals you have with your child, the better. While financial literacy is now on B.C.’s curriculum from kindergarten through Grade 12, it’s important to focus on money management at home, too. Here are a few ways to raise more financially literate kids.

Give age-appropriate financial lessons 

You can start allowing toddlers to hold money, be at the cash register and talk about how much things cost to spark initial conversations. While small children may not understand more complex concepts, this establishes that discussing money and budgeting is a positive thing. 

By the time children are five, you can begin sharing the value of earning money and budgeting for expenses. By focusing on saving and budgeting for things that children want, they gain an understanding of delayed gratification. 

In the 1960s Stanford University conducted “The Marshmallow Experiment” with hundreds of children between the ages of four and five. The experiment tested delayed gratification, with a researcher offering each child one marshmallow. The researcher then presented a deal: the child could eat the marshmallow now, or wait as the researcher left the room and came back to receive a second marshmallow.

The researchers followed each child for more than 40 years and found that those who waited patiently for the second marshmallow were more successful, whether they were measuring education, health or career. Like waiting for the second marshmallow, children can learn the cost of buying and the future rewards of delayed gratification. Self-discipline, willpower and patience are not predetermined traits and can be fostered by parents and caregivers.


Take chores, allowances and rewards into consideration

Each household is different, and some parents decide to give allowances for chores and other duties that contribute to the family unit. Allowances could be a financial benefit for kids that allows grownups to start conversations around money goals. Using an allowance as a baseline to talk about financial planning lets parents have more in-depth conversations with children at younger ages. 

Tapping plastic cards has become the norm, which can create a hurdle when trying to teach kids that when something is purchased dollars are exchanged. A solution for this could be to have a clear jar with a money substitute (such as play coins) that children have to physically remove from the jar in order to pay for something, which you can take as payment (and then use your card).   

Have open and honest conversations at every age

It’s not always easy to say “no” when your kids ask for something, whether it’s to pay to watch a movie, play a game on a new app or buy a toy. It’s even harder in times of uncertainty. If your cash flow has been affected because of a lost job or struggling business, having an age-appropriate conversation could remove fear and reinforce the differences between needs and wants. 

Younger kids will be able to grasp that financial situations can change, and high-school students can comprehend debt and the importance of managing cash resources. Speaking truthfully about household spending, without going into specific detail, helps kids accept that financial habits may need to change in order to keep them safe and healthy. 

Get expert advice on raising financially literate kids

Financial literacy is as important as reading, writing and math. The best money lessons start early and at home. Parents, caregivers and educators play a pivotal role in empowering children with financial confidence and knowledge. We want to ensure you have the tools you need to teach your children about healthy money management. Learn more about our Registered Education Savings Plans (RESPs) to grow your earnings tax-free until your child enrolls in a qualifying post-secondary program. Contact our Member Advice Centre to learn more or visit a branch to open a chequing and/or savings account for your child. If you visit a branch to open an account, your child will receive a set of Money Lessons Coin Banks to kick start their understanding of financial literacy.


Mutual funds and related financial planning services are offered through Qtrade Asset Management Inc. Financial planning services are available only from advisors who hold financial planning accreditation from applicable regulatory authorities.