In Canada, November is Financial Literacy Month and 2020 marks the 10th anniversary of this important national initiative. The focus of this year’s campaign, quite appropriately, is “to help Canadians learn how to manage their finances in challenging times.”
There’s not a single right approach to financial literacy education – it’s a large and multi-faceted issue. Financial literacy, for one thing, is not just about investments. For another, it is closely entwined with personal and family values.
The one thing that most people do agree on though, is that it starts with our youth. By starting to talk to our kids about money at a young age, we’re preparing them for the future and benefitting them in the long run.
As Jane Rooney has said:
“As parents, we want the best for our kids. As do teachers for their students. I believe that we can give them a big head start in life by teaching them early on money management skills that will last for a lifetime.
We can teach them to avoid pitfalls in financial decision-making before they make costly mistakes. And we can help them gradually take responsibility for their own financial well-being.“
She captures the essence of financial education perfectly. It’s about learning and the process of doing so, not just the end goal of becoming ‘financially literate’. This step-by-step process looks different for everyone. Whether it’s encouraging your kids to save for a new bike or explaining how an RESP works, financial education comes in all forms.
As I mentioned in a previous article, my wife and I decided to adopt a very open approach when managing and discussing finances with our children from a young age. Having this kind of transparency worked well for us and created a strong sense of empowerment and responsibility within our household.
When it comes to financial decisions, especially with your children, trust and accountability are key. But in order for this trust to set in, young people must develop the tools and knowledge required for weighing difficult choices. Teaching your children about money management and instilling concepts like self-control and budgeting go a long way. It’s all part of raising our young to become confident and successful adults.