A Dollar’s a Dollar

Money is not that different from food. The sooner your kids get started learning the basics, the easier it will be to develop good habits that can get them on the right track. There are some simple things you can do to give them a solid grasp of money early on to help them make positive and rational decisions in the future.
The First Five Years
Children absorb everything that happens around them in the first five years. Introduce games and activities where one of you plays storekeeper or banker. They’ll be able to identify good spending habits as you take them with you to the bank or out for groceries. As they get older, your child will likely want more “things”. That can be a cue to start an allowance and discuss saving and proper spending habits. A piggy bank is a great way to explain the idea of spending, sharing and saving.

Ages 6 – 12
At this age, children usually learn how to count money in school, and as they grow older they are more capable of managing their own spending and savings. If there’s an item they really want, try to explain its value in terms they’ll understand. For instance, how many lawns would you have to cut to afford a bicycle? They’ll have a goal to work towards and will likely appreciate the hard work they put into it.

Ages 13 – 17
As they develop through their teenage years, it’s likely that they’ll be under a lot of pressure to define themselves with how they dress or what they own. It’s important to discuss proper decision making so they understand the difference between wanting something and needing it. Let them make mistakes too. It’s a practical way for them to learn.

Tip: Rather than saying you can’t afford something, explain to your children why the purchase isn’t of good value or why you would prefer to save your money for another purpose instead.

For more ways to encourage your children to reach their savings goals and other financial tips and tools, visit rbc.com/couplesandfamilies. Get the advice you need and download your own personalized Guide to Everyday Finance.