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6 great reasons to talk to kids about money

It's not easy talking to your kids about money. According to a 2012 survey conducted by Ipsos Reid for ABC Life Literacy Canada, a quarter of young Canadians under 18 rarely, if ever, discuss money with their parents.

And yet, from a very young age, children are immersed in a world of consumption. In spite of this, talking about money is taboo among parents. To break the ice, it's better to get the conversation going sooner rather than later.

Marie Lachance, a professor of consumer science at Université Laval, offers 6 reasons to talk to kids about money. These are good habits to develop to get young people thinking about the abstract idea that is money.

  1. Help them understand the lingo
    Talking about money in front of young children is a roundabout way of initiating young ears to financial terminology. Even if they don't take part in the conversation, they're listening. A simple conversation can familiarize them with basic financial terms and concepts.
  2. Eliminate taboos
    Children get interested at a young age in consumption and, inevitably, in money. They see adults using it, and they love handling it. Has there ever been a child who hasn't played “store”? Not talking about it at all or talking about it in secret tells children that money is a taboo topic and that it's better not to discuss it with adults.
  3. Establish a healthy relationship with money
    In life, there is spending for needs and spending for wants. There are constant choices to be made, and children need to understand this; things have a value, which is what gives money its meaning. To help your children have a healthy relationship with money, you have to walk the talk. In other words, the things adults say have to be consistent with their consumption behaviour. What good is a theory if it doesn't lead to practice?
  4. Let them know where money comes from
    Money doesn't grow in banking machines. For adults, that's obvious. It's a bit less so for children. In fact, the source of money may seem mysterious and require some explanation. They need to be told at some point that money comes from the work parents do and that it's a limited resource for most families.
  5. Demystify methods of payment
    Credit, debit, cash, buy now, pay later… it's hard to make heads or tails of it all. For children, the value of money is a difficult concept to grasp. If the vast majority of purchases are made using virtual methods of payment, then the value of money becomes completely abstract. Each method of payment has its advantages, disadvantages and costs, and it's a good idea to know what they are.
  6. Understand the importance of a budget
    A budget is the first step toward financial independence. That's why you need to talk to kids about budgeting early on. While the idea of planning may not be easy to explain, it's easy to experience. Starting at age 5, children can have their own experiences with spending, for example, with pocket money or saving up for something they really want. Children who gain experience with savings early on have a better chance of maintaining good budgetary habits as they get older.

To do with children

Discover our educational activities on the circulation of money: