To raise responsible children, you need to talk about money: how families earn it, spend it and why they (hopefully) save and invest it. To help jump-start these conversations, we’ve put together ideas and tips about finances, from an innovative piggy bank that helps kids dream big to computer games that teach the basics of budgeting. With a bit of practice — and support from parents — children can become financially savvy from a young age.
Since kindergarten, my daughter has come home once a month with a bright orange envelope from the Caisse Desjardins du Québec. She gathers up her money, fills out the section indicating how much she is depositing, seals the envelope and returns it to school. The envelopes are sent to the Caisse, and the following month my daughter can check a deposit book to see how her “nest egg” is growing.
It’s all part of the “school caisse” program, which helps students in elementary school learn about the value of saving money. The program is administered through the schools, but the Desjardins website has free information available on money, saving and financial planning for children. Visit www.desjardins.com/en and then under the section “Who Am I,” choose “parent.”
Canada Credit, a non-profit organization offering credit counselling, has compiled a list of articles about kids and money. Topics range from the pitfalls of teenagers having credit cards to talking with kids about tough economic times. Visit www.creditcanada.com and click on “In the News.” Under the section “news articles,” you’ll find the link for kids and money. Adults might also want to check out the site’s financial tools, including a budget tracker, mortgage calculator and more.
ING Direct has created a website just for kids that has colourful, interactive computer games to teach young people about finances. By clicking on www.planetorange.ca, kids ages 5-12 will learn about earning, saving, investing and spending. Even topics like budgets and RRSPs, which adults might think of as being “boring” or “beyond the kids,” are presented in a clear, child-friendly way. There is also a section of the website listing various resources for parents.
An award-winning piggy bank
by Kelly Wilton
I spend a great deal of time thinking about ways to teach my 4-year-old son Max about the value of money. Every time I see a bowl of cereal that hasn’t been finished or half-eaten apples rotting in the fruit bowl, I wonder how I can teach him that food is expensive and you have to work hard to earn money. I also know how much he would benefit from an early understanding of the power of saving, compound interest, living within your means and paying your credits cards off in full each month.
So last year, I bought him his first piggy bank at Dix Milles Villages in the hopes that he would learn how to save his little pennies. I had to question the effectiveness of my purchase, however, when I saw Max launching Mr. Piggy Bank across the living room like a rocket ship.
Then this year, while flipping through the pages of a toy catalogue, I came upon an item that made me want to try to the whole “save your money” thing again. It is called a Moonjar Moneybox, and it’s essentially a piggy bank with three compartments: one for saving, one for spending and the other for sharing.
The Moonjar was originally launched in 2001 by Eulalie M. Scandiuzzi, a native of Seattle. The “moon” part stands for “to shoot for the moon; to go after dreams and goals” and the “jar” part represents an ancient custom where wishes or dreams are written down and placed in a special jar for future celebration.
The Moonjar project came to Canada in 2008 when Ottawa resident Brent Dobson saw the piggy bank and fell in love with the concept. “I wanted my own children to grow up with a healthy attitude towards money,” he says. “I wanted to open up conversations about allowances, about sharing with others, about making smart financial choices and saving for things you really want or need.”
Today, the Moonjar is available across the country and has won many accolades, including the Global Learning Initiative Award, Teachers Choice Award and the National Parenting Center Seal of Approval. The Moonjar company’s website, www.moonjar.ca, includes ideas, tips, links and products that help families think and talk about financial planning.
I bought the Moonjar for Max, reassuring myself that he is now a year older and probably more open to thinking about money. Now, every time he receives some cash, I will make sure he puts one third in each of these compartments. And voila, he will be a money wizard and philanthropist before the age of 5. Well, one can hope anyway.
In Montreal, the Moonjar is available at Art Enfant in Westmount, 4968 Sherbrooke St. W., (514) 488-1022. Or you can purchase it online at www.moonjar.ca (standard box $12, classic box $30).
6 tips for teaching kids about money
Eric Tyson, author of Personal Finance For Dummies®, 6th Edition (Wiley, $21.99), offers the following tips on how to teach kids about money:
- Explain how much things cost. A great hands-on way to teach kids what things cost is to take them on a “money tour” around the house. Explain that hot water costs more than cold water and talk about bumping up the heat results in higher power bills.
- Teach them how to shop wisely. Family shopping trips are a great opportunity to show kids the value of product research and comparison shopping. You can also talk about needs versus wants and why coupons can save you money.
- Realize that kids learn what they live. Adults who are extravagant with money and who fail to save for the future can expect to raise children who are accomplished spenders and poor savers. Be honest with yourself and if your financial habits are poor, overhaul them now.
- Encourage older kids to get a job. An allowance doesn’t have to be the only way for your kids to earn money. Your child’s initial exposure to working for a living can start with something as simple as a lemonade stand. Depending on their age, children might do yard work for neighbours or offer babysitting services.
- Start them saving and investing early. It’s never too early to start saving. Have your kids save a significant portion of their allowance money (Tyson recommends one-third each week) toward longer-term goals, such as university. As they accumulate more significant savings, introduce the concept of investing.
- Find entertaining ways to teach good money habits. It’s important to find entertaining ways to teach kids about money. For younger kids, Tyson recommends age-appropriate books like The Berenstain Bears Get the Gimmies. For late-elementary-school-aged kids, Quest for the Pillars of Wealth by J.J. Pritchard is a chapter book that teaches the major personal finance concepts through an engaging adventure story. And don’t forget about Monopoly and Life, two board games that help kids think about and use money effectively.
Financial workshops for kids
By Eileen Travers
Montrealer Angelo Pace recently launched Funancial Education, a program aimed at kids in kindergarten through high school, which covers everything from the history of money to how to build a business. The goal is to boost children’s knowledge of money so they are better prepared for adulthood.
“There’s no formal education about money (in schools),” Pace says, adding that children today are bombarded with ads urging them to buy, buy, buy without explaining how things like credit cards, debt and interest rates actually work. The program takes a practical, nuts and bolts approach to issues like saving, budgeting, investing and starting a business.
Funancial Education offers after-school programs, a spring break camp and summer workshops for kids and adults. “Given the problems with people and money these days, we want to teach the basics and have fun doing it,” Pace says. For updates on programs and workshops, call (514) 945-7963 or go to www.funancialeducation.com.