How not to raise money monsters

Ensure your kids are money-wise with this lesson plan for every stage of childhood

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From the September/October 2016 issue of the magazine.

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It’s every parent’s biggest fear…that we’re spoiling them rotten. What’s the secret to raising kids who are healthy, wealthy and wise with their money (and who will move out before they turn 30)? Our MoneySense experts offer a lesson plan for every age and stage of childhood.

Ages 0-6: Their first money moves

Money is the greatest teaching tool of all time. And when you throw kids and parents into the mix, it has the power to change lives. Years back, I watched as my own preschool-aged children, Luca and Laura, figured out that if you’ve got cash, you can get stuff. The summery jingle of the ice-cream truck was enough for them to drop any toy they had in the sandbox and bolt into the house demanding a couple of loonies for ice-cream—QUICK!—before the truck left. As my pockets were picked dry daily, I realized it was time to start teaching them the value of money. But how do you get started?

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Explain basic budgeting to kids »

Ages 7-12: Saving not spending

During the ages 7 to 12, the money questions become more plentiful—and more challenging. And just as you want them to learn household skills like chopping veggies and eating healthily, you also want them to understand basic concepts about saving and spending money. “I’ll go to the store with my young daughter Abby and do a lot of what I call, ‘browsing without buying,’” says MoneySense columnist Bruce Sellery. “We’ll go to the store just to look much of the time but I’m clear with her that we’re not buying, we’re browsing. That’s important.” So, how do you teach them the basics?

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Explain compound interest to kids »

Ages 13-17: Big kids, bigger budget

It happens so fast you could miss it. But in their teens, kids need to start moving from thinking about money in small amounts (weekly) to larger amounts (monthly). “They should start getting more money for longer periods of time, but now they also need to start taking personal responsibility for some spending categories themselves,” says Certified Financial Planner Trevor Van Nest. So if you were giving them $20 a week, you may want to give them $80 monthly plus a bit extra for new teen expenses like music subscriptions and clothes. What else should you be doing?

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Explain net worth to kids »

Ages 18+: Preparing to launch

This is the time young adults start taking their first steps towards independence. Many will be moving on to college or university for further studies while others will be taking a gap year off to see the world. Your job now is to encourage their passions, whatever they may be. Help pay for education, housing and other expenses and encourage them to contribute some of their money towards their studies. But is there more you can do?

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How to explain…

Basic budgeting to kids »
Compound interest to kids 
»
Net worth to kids »

Ways your kids can earn and save

Run a successful lemonade stand »
Save money at school  »

Answers to awkward money questions

How can I avoid money tantrums? »
Should you pay your kids to volunteer? »
Should I buy my 10-year-old a smartphone? »
Does my kid need a clothing allowance? »
Should I give my teen a credit card? »
My kid called from college and is broke again »

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