Financial Literacy: Teaching Kids about Dollars and Sense

Before my boys could walk, they learned how to shop.

I’ve been taking my boys shopping with me for their entire lives. Whether it’s a full grocery run on a busy Saturday morning or a simple mall detour for a pair of gloves, my sons have always tagged along. Some friends are amazed, the usual question being, “How do you stand the whining and begging and asking for stuff?”

(I don’t always stand it – sometimes, you can find me having an up close and personal “talk” with one of the kids. And sometimes, there’s a bit of growling involved, too.)

For the most part, however, shopping with my boys is manageable, for the simple reason that from the start, I’ve made financial education a priority. My 7-year old can identify the difference between items on sale and items on clearance. My 5-year old can do simple math to determine the amount of savings on reduced prices. And both of them know the official “shopping rule” in our family: Don’t ask mom for something if it’s not on sale. This includes toys, treats and such. Seriously, no point in wasting breath – I won’t even consider it.

(Found this old photo of Ryder shopping the sale aisle… and selecting an item with a red sticker! Way to go – I’ve taught him well! He knows when to ask mommy for a treat!)
Kids’ understanding of money concepts grows as they do. The following guidelines, courtesy of TD Canada’s Smart Money Toolkit for Parents, can help you tailor money lessons to your child’s age and developmental stage. 

Ages 5-6: Bill Recognition. At this stage, kids are interested in the different shapes and colours of money. Handling real money can help them learn more about it.

Ages 7-8: Saving Skills. Generally, seven- and eight-year-olds understand the concept of savings. Most have had a piggy bank, which is a fun, playful way to save money.

Ages 9-12: Budgeting Allowance. Pre-teens are usually receiving an allowance or gift money that they need to manage. The amount doesn’t matter as much as how it’s handled.

Ages 13-15: Earning Money. Many teens either have part-time jobs or are looking for one. They’re learning that additional income brings additional responsibility.

Ages 16-18: Purchasing Power. Teens at this stage will likely have some part-time income. Reinforce the connection between their part-time earnings and their purchasing power.

You can also find additional tools and resources, including an online Money Fun Activity Book, from TD Canada.

Where will your children learn their most powerful lessons about money? From YOU. Set an example for your kids; be smart with your finances and be cognizant of your spending. Sticking to a budget can help you keep on top of all the expenses parenthood entails and save for the future. (Tip: A Tax-Free Savings Account (TFSA) is a great way to save tax-free or use as an emergency fund.) And, if your money skills aren’t where you’d like them to be, consider taking a class, visiting the library or researching online. The more you learn, the more you can teach your kids.

I often joke about being a shopaholic and am quick to jump on a sale. However, I can afford the luxury of impulse purchases because my finances are always in order. The example I strive to set for my boys is to work hard, save hard, and from time to time, you can spend hard, too. As long as there’s balance.

This post is sponsored by TD Canada. The opinions on this blog, as always, are my own.