FLM 2017: The Best Tools/Apps for Teaching Kids about Money and DebtNov 03, 2017
You may think your kids are too young to learn about finance, but, in reality, teaching your kids about money and debt from an early age can give them an advantage. BC residents have the third-highest debt load in Canada and it’s important to learn how to manage debt, avoid debt and balance a budget to get by in today’s economy.
Resources for young children
Children learn by example so it might be a good time to brush up on your own financial literacy this month so you can demonstrate healthy habits. Here are some tips:
- Talk about wants vs. needs in terms your child can understand so they can see how that might work within your household.
- Introduce an allowance so your child can learn to save up for important purchases. Teach them to save half of what they earn from birthdays, holidays and allowance, and use the other half for their wants.
- Teach consequences. Example: If your child spends all of his/her spending money, they will need to wait patiently and save up to buy another item.
Practical Money Skills by Visa offers financial games and apps that offer a fun way to learn finance for kids.
Preteens and teen financial tips
As your children get older, you can add more money lessons within your family routine. Here are some age-appropriate ways to incorporate money lessons:
- Offer incentives. For extra work that’s over and above regular chores, you could offer more money on top of their weekly allowance. Hard work=recognition.
- Build a family budget. Discuss the cost of running your household by showing them how much groceries, bills and the mortgage cost and ask them to help find ways to lower costs. Let them see you shopping for deals, planning your spending and contributing to family financial decisions
- Talk about debt. Debt shouldn’t be a secret. Talk to your kids about how to wisely manage credit, build credit and pay off debts in full each month to avoid high interest charges. Use the FCAC’s debt calculator to teach the real costs associated with credit cards.
Young-adult money lessons
As your child enters post-secondary school, speak to them about how to avoid student debt by maintaining a job, offsetting their living costs by staying with friends, and learning basic skills like cooking so they can save on food. A student loan is a big responsibility for a young adult so it’s important to have conversations beforehand about only borrowing what is necessary and avoid student debt regret.