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Children Need to Learn the Fundamentals of Personal Finance

Home economics used to be the cornerstone of our parents’ education. In recent years, mandatory home ec classes have  been cut to make way for computer labs. But the skills learned in those home ec classes are more relevant than ever before. Home economics education in schools is important – our children should be provided with these mandatory financial literacy lessons. In the meantime, parents can take on the responsibility of teaching children the fundamentals of personal finance at home. Here are some good tips.

Financial literacy programs

To promote financial literacy, Canada’s banks offer a number of financial literacy programs. These programs are aimed at helping Canadians better understand financial matters and improving their money management skills. By improving financial literacy, you’re able to make better financial decisions. Bank the Rest is a program offered by Scotiabank that makes savings easier. Here’s how it works: when you use your Scotiabank debit card, purchases are automatically rounded up to the next multiple of $1 or $5. The difference between the purchase and the rounded up amounts is automatically transferred to your savings account, making savings automatic.

Enactus is a program sponsored in by Canada’s big banks – CIBC, HSBC Bank Canada, Scotiabank and TD Bank – that provides grants to students to develop and implement sustainable financial education projects. Millennials who are social media savvy are sure to enjoy the TD Money Lounge on Facebook. This is a Facebook group that offers financial education for students and youth. Clearfacts.ca is a financial literacy website sponsored by National Bank. It offers articles and information for families, homeowners, students and business owners.

Teaching our children about money

Adults aren’t the only ones who should learn about money. Teaching children basic financial literacy skills is important, especially when they’re at an impressionable age. The article, 15 money rules kids should learn, offers a number of key financial lessons every child should learn. The first rule is about only spending money after you earn it. When you’re financially disciplined and you save for big purchases ahead of time, you can avoid relying on debt.

Another money rule is to teach your children how to make their own financial decisions. When your son or daughter begins to ask for you to buy them toys, consider giving them an allowance. By paying your children an allowance, it will help them realize the value of a dollar and the fact that money doesn’t grow on trees. If your child wants the latest, great toy, he or she will need to save for it.

An often-neglected part of budgeting is saving. Another money rule involves the importance of saving. This rule says that at least half of the money must stay inside the piggybank. This helps teach children the importance about paying yourself first. When you make saving a part of your family budget, you’ll be less likely to spend every penny you earn.

Teaching your kids about money makes sense

When you teach your children about money at an early age, it helps prepare them to be self-sufficient, fiscally responsible adults. Being financial literate helps in good economic times and in challenging economic times. If your children are faced with financial difficulties as adults, like the need for bankruptcy, they’ll be better prepared. Perhaps now more than ever, schools need to consider reviving mandatory home ec classes to teach our children the fundamentals of personal finance.

Do you try to teach your children the fundamentals of personal finance? Join the conversation. #LetsTalkDebt, #BDOdebtrelief



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