How to be a Strong Financial Role Model for Kids
SISIP Financial Esquimalt Team Children of all ages notice how you manage money, so take this as an opportunity to teach financial literacy and smart money habits. Start early by teaching age-appropriate financial habits, lead by example, and use real-life experiences to help children build long-term money management skills. - Whether it’s how you handle stress, treat others, or react when the bill arrives, children notice everything — including how you manage money. Here’s how to set a great financial example for kids. Teach a Five Year Old Children don’t read stock market reports, but they do understand cause and effect. Teach basic money habits by: Explaining: Children can think money is endless if they only see a card tap. Try to narrate as you pay with “I’m using my card, but I have to pay this money back soon.” Allowing choice: If a child wants a toy at the store, allow them to buy it or save for something better in the future. This teaches children about avoiding impulse purchases. Talk to an 18-Year Old At this age, things get real with your child’s first job, first car, and possibly their first taste of credit card debt. Teach smart money tips by: Having the credit card talk: Explain how a strong credit score can help rent apartments and secure loans, but paying minimum balances can quickly lead to financial stress. Reiterating the concept of interest: If they charge $500 on a credit card with 20 per cent interest and make minimum payments, it will take over nine years and $584 in interest to pay off. Encourage investing and saving: Help open a Tax-Free Saving Account (TFSA) and support them in starting to consistently invest a small amount. Have Open Conversations Children can sometimes grow up thinking finances are a...