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Money education with your kids – the essentials

It doesn’t cost much, except time – but neglecting it could be costly for your kids. That would be teaching them age-appropriate money management skills they may not learn in school. A dollars and sense education will help them achieve their life goals, lead a better life and help others.

Here are some age-related toonie tutorials to get you started on the conversation.

6 – 12 years

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  • Money can be fun - Start with a ‘fun’ bank for the kids to fill their coins with and eventually graduate to a ‘real’ bank account and allowance tied to certain tasks to learn responsibility. A fixed amount allowance is best because it teaches that there are serious choices to be made about when to spend and when to save.
  • Explain how money grows - Deposit at least 10 per cent of their allowance in a deposit account. Explain how interest makes their money grow. Board games like Monopoly or an interactive website such as the Canadian Foundation for Economic Education is also a great money education tool.
  • Start simple - Develop a simple budget plan that includes keeping their tax receipts and statements to keep track of their money.
  • Give back - A charitable giving component will show them how their money can have a positive impact in the community. Give an allowance ‘bonus’ for special work with the requirement that this extra money must be invested.
  • Looking forward - Introduce them to the concepts of ‘compounding’ and tax-saving through such long-term investments as a Registered Retirement Savings Plan (RRSP).

16 – 18 years

Money education with your kids – the essentials
  • Planning ahead - Have each child file a tax return as soon as they have a job that results in a T4. They’ll get a more ‘personal’ view of income taxes and build up room for future contributions to an RRSP.
  • Play it safe - Co-sign for a credit card in their name with a low limit. Carefully monitor its use and stress the importance of making their monthly card payments to maintain a good credit rating and avoid high interest rates or late fees. Use monthly credit card statements to discuss their spending patterns and best uses of their purchasing power.

Other thoughts to consider

  • Remember to involve your children in your family finances and discuss how your family budget must balance expenses and income.
  • Introduce them to the importance of financial planning, and savings and investment products – mutual funds, stocks, bonds, Guaranteed Investment Certificates, registered and non-registered savings plans – the role of insurance, and investment concepts like portfolio diversification and risk/reward decisions.

Fun online tools to use with your kids

Parents can start playing money games with their kids when they are as young as two years old. Doing this is a great way to teach your kids how to be more money savvy at a young age, while having fun and bonding together. Below are a few money skill online applications to explore with your kids :

  • Amazing Coin CAN ($1.99)- Featuring eight interactive games about Canadian coins, kids will enjoy counting, paying and making change with their own currency. A quarter rewards for each correct answer, allowing kids to buy food in the store, and eat it up later.
  • Jungle Coins ($2.99) - A cute, colourful app that teaches kids in JK to Grade 4 currency at varying levels. They’ll hunt for coins, count money, compare sums, and calculate correct change. Worth every penny!

    It’s smart to talk money with your children and if you need help, give your financial advisor a call. A professional perspective can add welcome weight to your toonie tutorials.

    This material is written and published by Investors Group Financial Services Inc. (in Quebec – a Financial Services Firm), presents general information only and is not a solicitation to buy or sell any investments. Contact a financial advisor for specific advice about your circumstances. For more information on this topic please contact your Investors Group Consultant.

    1 ‘Money Games’ By: Geoff Kirbyson,, May 23, 2012.