The time you invest teaching your kids the basics of money management will pay long-term dividends.

Financial skills are essential for personal success, and teaching children the basics as they grow can help them as working adults. In an age of virtual currency, soaring debt, and rising tuition costs, it’s more important than ever to be prepared. Lessons in money management aren’t common in Canadian schools, but our guide will answer some common questions and help you teach your children the value of smart financial decisions.

At what age should I start to teach my kids about money?


The experts at Money As You Grow by the President’s Advisory Council suggest that you should start teaching your children about money at three years old. At this age, it’s important to start simple. “You need money to buy things” is a good introductory to the concept of money for your little one. Help them understand that some of the things they love like playing with friends are free, while others, like ice cream and clothes, cost money. Tell them how you earn a living and explain that some jobs earn more than others. This is also a great way to begin introducing some ideas for their future career aspirations.

An important point to emphasize is that they will sometimes have to wait for the things they want. If you occasionally give your child a small amount of money, have them put some of it in their piggy bank so they can buy a toy for themselves once they’ve saved enough. Point out the differences between wants and needs, and tell your child how you decide what yours are.

As your children get older, you can start to introduce more advanced concepts like comparing prices, paying interest, accumulating debt, and using a credit card. For more ideas, visit the Financial Consumer Agency of Canada’s Teaching Children About Money page.

Should my kids have their own bank account?


CNN Money recommends waiting until they are nine or ten years old. If you’re giving them small amounts of money for their account, you can start to introduce the concept of interest by encouraging them to let it sit. Even though their earnings will be small, it’s a great way to prepare them for saving as an adult. If your child hasn’t reached this age or you don’t feel like they are ready yet, a piggy bank is a simple way to pave the path to off-site savings.

To a child, even a few dollars can seem like a lot of money. Investopedia advises parents to let their children spend the money they’ve saved freely if they wish. Point out that you won’t be providing more if your child spends his or her money too quickly. This a great life lesson that will help them learn the value of saving.

How can I tell my kids “no” when they want something?


In some homes, the child runs the show and the parents grant their every wish. You’ve probably seen this happening in other families you know. It’s easy to fall into this trap, but there are several ways to avoid it. Parenting Magazine recommends giving your kids what they need, but not everything they want. “The more kids are given, the less they appreciate, and the more they demand. When it comes to gifts and rewards, moderation is best. A few meaningful items have more meaning than an endless bounty of plenty.” Everyone loves to give their kids what they want, but it can lead to an unhealthy sense of entitlement. Some of your decisions might upset your child now, but it will be an important life lesson for their future.

You can also let your child earn money by taking on responsibility around the house. Doing chores and earning money can help them understand the value of a dollar and the concept of working for the things they want. A cleaner home and a lesson learned — it’s a win-win for the family.

How can I teach my kids to be responsible with digital currency?


The idea of virtual money can be difficult for a youngster to grasp. Debit cards make money spit out of machines and in-app purchases provide gems with the wave of a finger. A good place to start is by allowing your child to pay for the virtual products that they want.

Amanda from Mummuhh saw success with her method. “The last two apps my son got cost $2.49 each. He had just received $5 from the tooth fairy (for losing his molar), I explained that if he wanted to download the apps he would need to give me the tooth fairy money. I felt it was important to put it into real, traditional money terms.”

If your kids are a little bit older, help them put a small amount of their money on a prepaid credit card or gift card. If they want to rent a movie online, show them how much it will cost so they understand that it’s the same as shopping with cash.

It doesn’t take much to teach your kids the basics of money management, but it may help them in the long run. For more advice, be sure to check out the resource links below. If you have any questions, be sure to Tweet to @AffirmFinancial!



1 “Forbes: The 5 Most Important Money Lessons To Teach Your Kids”. Retrieved 2 November 2015.
2 “CNN Money: Teaching kids financial responsibility”. Retrieved 3 November 2015.
3 “Financial Consumer Agency Of Canada: Teaching children about money”. Retrieved 2 November 2015.
4 “Queen Of Free: The First Lesson for Kids to Learn About Money”. Retrieved 2 November 2015.
5 “Business News Daily: What to Teach Kids About Money”. Retrieved 3 November 2015.
6 “The Globe And Mail: How to help the children of Gen Y prepare…”. Retrieved 3 November 2015.
7 “The Wall Street Journal: The Smart Way to Teach Children About Money”. Retrieved 4 November 2015.
8 “President’s Advisory Council: Money As You Grow”. Retrieved 3 November 2015.
9 “Parenting: Do Your Kids Rule the Roost?”. Retrieved 4 November 2015.
10 “Investopedia: Opening Your Child’s First Bank Account”. Retrieved 4 November 2015.