Financial education

Why it’s important to talk to children about money matters

One of my children recently asked me if he could borrow a few dollars since he needed to buy specialized (and mandatory) boots for work. After some prodding on my part, I learned that, although he knew well in advance that this important purchase was coming up, he had not set money aside to ensure he would be able to purchase these costly boots and now could not cover the expense.

Although my son is a new adult, money-smart education should be a continuing conversation. I decided to reach out to Robin Taub—a chartered professional accountant and author who has written on the topic of kids and financial education—about the importance of money as an ongoing discussion, for children and adults alike.

Reasons for education

Taub offers these tips for parents:
● If we don’t teach our children about money, they will be lacking a basic life skill, which could lead to financial struggles—and expensive mistakes—down the road when the stakes are higher.
● Money worries are the greatest source of stress—more than work, personal relationships or health. Almost half of all Canadians say they’ve lost sleep over money worries. Financial stress can also lead to more serious health problems, like heart disease, high blood pressure and mental health issues such as depression and anxiety. Stress and anxiety can even make you more vulnerable to fraud. Don’t we want better for our kids?
● Kids may start to form bad habits, like living beyond their means, which become difficult to break as they get older. Habits create neural grooves that rarely disappear completely, so it’s easier to establish good habits early rather than try to rewire bad habits later.

Rewards of education

The potential payoffs are great:
● Children will be financially literate, meaning they’ll have the knowledge, skills and confidence to make responsible financial decisions at every life stage.
● They will be financially independent and responsible. They’ll be off the parental payroll, capable of exercising good judgment and making sound financial decisions.
● They will have a sense of purpose, not a sense of entitlement, and be motivated to achieve something on their own.
The topic of money—its advantages and pitfalls—is now an ongoing discussion in my home. Yes, my children roll their eyes, thinking they know it all, but that does not matter. I will always be their mother.

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