Do you remember a time, when your parents sat you down and tried to explain the concept of “money” to you? Well, whether your memories of those days are good or bad, ultimately, you did learn from it. Every parent has their unique perspective on money management and depending on your upbringing, you likely formulated your attitude at a young age. 
It is a well-known fact that children will pick up habits from their parents, and we’d like to do our best to prepare those parents.  There are a few crucial steps to take to prepare the next generation for financial responsibility and future wealth. Here is a handful of them!

Open Conversations

One of the most common themes that come up was that most wished their parents would have had more open conversations about money, in a judgement-free zone. It wasn’t so much about the lessons, but rather that money was never talked about. As children, we don’t know how much things cost, nor understand the value of money, unless our parents talk about it and share the financial experiences they are having, both good and bad.

Your children are likely to have a different financial upbringing than the one you may have had, and while this upbringing may be easier (or harder), it comes with its own set of challenges and benefits.  Embrace the fact that you’ve placed your children in a position where they are able to learn financial responsibility from an early age.

Younger children don’t understand the numbers or what they mean, but they become familiar with the importance of the conversations that are being had. Unfortunately, financial planning and investing is not something commonly taught in school, so children often must rely on their parents and family for guidance.

Understand values

One of the most important jobs parents have is to instil values in their children, including values about money. Children quickly observe what is important in a household. Do we see parents spending on material things or do value experiences? Is money spent on expensive possessions or saved for family vacations? Do education and extracurricular activities such as piano, karate and tennis lessons take priority? Family values tend to dictate which “buckets” money goes to.

Each family has their unique set of values and having open conversations on those values and potentially “why” you are choosing to spend money on one thing over another. As we’ve noted above, communication, even early on, can play a big role.

Financial Independence

It’s important you allow your children the opportunity to handle money on their own, otherwise, how will they learn? It can start with something as simple as a weekly allowance or income from a part-time job. However, don’t let this new freedom of money go without a conversation: talk through the options of what they can do with their money — for example, spending, saving or donating. This allows them to not only feel as though they are truly in control, but it starts them off on the right note.


Encourage them to save. As soon as you can, try to explain the importance of a TFSA and/or RRSP. What this may mean when they have their first big-person job. Initially, this can mean setting up a bank savings account that they can view online. If they have one, share their registered education savings plan statements with them, so they can see the plans grow over time.

It is vital for children to distinguish between saving and investing, as this is how one truly builds wealth.

Make it fun

From watching their savings grow to investing, money lessons don’t always have to be boring. Help your children by setting goals for savings or something that they want to purchase. Provide rewards when goals are met.

Remember that you don’t need to be a financial adviser to educate your children about money and build their financial literacy. Simply exposing them to money, allowing them to understand the value of money (even making some mistakes) and showing them the importance of saving and spending responsibly. Empower them to develop good money habits and manage their finances throughout the rest of their lives.