How to set up your child for financial success

Teach your child about money

No parent wants their child to learn lessons about money the hard way. That’s why it’s so important to teach them about the value of money and how to manage it successfully.

• Show them how money works

  Help your child understand how your credit card relates to your bank account and your paycheque.

• Encourage them to budget

  It’s important your child learns to live within their means, whether that’s their allowance or the pay from their first job. Show them how your household budget works. Encourage them to save up for something they need or want so they’ll appreciate the item more and learn to choose what they spend their money on.

• Let them earn an allowance

  It may just start with a few dollars a week, but trading household chores for an allowance helps them learn about money is earned through effort.

• Open a savings account for them

  Once your child has a little money of their own, open them a savings account. It can help them learn that even with their allowance or their first paycheque, they need to set aside a substantial portion and not just spend it all. As well, they’ll learn how accumulating interest on their savings can help them make more money. This is a great opportunity to introduce them to investing including various account types, investment types and how compounding works.

• Teach them about credit and how it works

  This includes what a credit score is and how to establish one, the different types of credit including credit cards, mortgages and lines of credit, their interest rates and the importance of repayment.