When should you start talking about finances with your kids?

There are lessons to be learned at every age. In terms of finances, do you know what your child is ready for?

“When it comes time to talk about money, all parents want to give their kids good advice. But it's not always easy to know where to start,” says Lori Brabant Hudon, an advisor with the educational programs for youth at Desjardins.

There are 2 major points to consider when talking about finances with your kids: their psychological development and schooling. It's important to remember their maturity level and what they've learned at school.

Here's an overview of the concepts and the age your child is ready to process them.

Basic concepts

The size and value of coins, and the fact that we obtain money in exchange for work, are concepts that should be introduced around the age of 6. “Lessons are learned gradually, and it's important not to assume that kids' understanding is the same as ours,” explains Lori. Even relatively simple concepts, like debit cards that allow you to withdraw money from your account, may still be hard to grasp for some 10-year-olds.

Responsible consumption

Children should be taught at a very young age to differentiate between wants and needs, which isn't easy when life is all about the present moment. Later, around the age of 10, they'll be better able to prioritize their needs and think more critically about the influence of advertising.

Savings

At age 6-7, parents can start encouraging children to put money aside, teaching them to wait before getting what they want. Around age 8-9, they can start planning ahead for a purchase, because they've learned mathematical concepts such as addition and division that allow them to calculate how much they can save in a month.

However, saving and looking forward to a purchase comes more naturally around the age of 10-11. At this stage they understand budgets, because they've learned about percentages. “They can relate better once they start having a small income, like an allowance, for example,” adds the advisor.

Credit

Credit is the last concept to be learned before adolescence. Demystify the concept of lending money and explain that loans come with a commitment.

Calculo - This link will open in a new window is an online tool that helps make your child's dreams a reality by teaching them how to set a saving goal and providing them a with plan to reach it.

Wherever they are in their development, hands-on learning is always the best way to get them interested. As a starting point, here are some ideas of activities you can do at home, especially designed for different age groups.