A new poll from BMO Financial group finds that 96 per cent of Canadian adults surveyed believe it’s important for parents to talk to their children about managing money.
But that same poll finds that only 18 per cent of respondents have actually had those conversations with their kids.
To turn parents’ good intentions into action BMO teamed with the non-profit Canadian Foundation for Economic Education to make Wednesday “Talk With Our Kids About Money Day.”
“Between what we think and how we behave there is indeed a distance and a disconnect,” says BMO Nesbitt Burns chairman Jacques Menard. “Parents spend more time talking to their kids about school and about their hobbies…than they talk about money.”
More than 400 schools across Canada will take part in the program, and BMO estimates at least 50,000 Canadian children will talk to a parent or teacher about financial literacy.
To jumpstart the initiative experts from BMO and CFEE offered a few tips on teaching your kids to think about money.
- Inclusion is Key
If you’re having a garage sale this spring, invite your kids to set up their own table and sell their old trinkets. Allow them to keep the proceeds, but make sure you talk to them about what to do with the money.
“There’s something that might have just passed as an average day in the family,” says Alyson Schafer, a parenting expert and contributor to the initiative. “(But it’s also) a financial literacy lesson for their kids.”
- Birthday Budget I
If you’re planning a birthday party for your child, set a budget and include him or her in discussions about how to apportion the money. This way, your children will realize money is a finite resource while also learning to prioritize. If the budget doesn’t allow for a giant cake and helium balloons, your son or daughter will have to figure out quickly which one is more important.
- The Bucket List
Teach them to visualize different types of savings goals by having them draw three buckets into which their money will flow. Bucket number one is for short-term goals, Number two is for longer-term objectives, and the third is for RESPs.
- Birthday Budget II
Instead of buying your child a toy or video game as a birthday gift, why not buy stock? Serge Pepin, BMO Asset Management’s VP of investment strategy, suggests buying a few shares of a company like McDonald’s or Disney. The objective is to use a company your children recognize to help familiarize them with investing and the stock market.
- But Keep It Simple
Pepin says it isn’t necessary to introduce kids to much besides savings and stocks. Flooding young people with information with information about hedge funds and derivatives won’t necessarily make them more financially literate. Pepin says it will probably do the opposite, confusing them and turning them off of the topic.
“You don’t want to create a scary or confusing environment for kids,” he says. “Create a fun and interactive environment and invite in some simple concepts.”