November is Financial Literacy Month in Canada and this year’s theme is breaking the taboo around talking about money.
There are lots of reasons why parents don’t talk to their kids about money, such as:
- lack of time
- lack of knowledge
- lack of opportunity
- shame and feeling like they’re not good at it themselves
- fear of making mistakes
- not knowing how much information to share about family wealth and at what age
But your kids want to learn about money, and they want their parents to teach them. According to research, kids who are taught about money at home have a tremendous advantage. They’re more confident and optimistic about their financial futures and better prepared for the decisions they’ll face.
So try not to make money a taboo topic at home, even though you make get uncomfortable questions like, “Are we rich/poor?” or “How much money do you make?” or “How much is our mortgage?”
Try to treat these questions as an opening to talk to your kids about money and share information that’s age-appropriate, taking into account your child’s age, maturity and temperament. And stress confidentiality. After all, these are private family matters, not something you want them sharing all over social media!
It’s also an opportunity to talk about healthy money habits, like the importance of paying yourself first, knowing the difference between needs and wants and setting up a financial safety net. These are just three examples, but The Wisest Investment lays out eleven Healthy Habits of Financial Management. These common-sense guidelines help you keep your financial affairs in order and set the stage for any discussion you may want to have with your kids about money.
You don’t have to set aside a special time to talk to your kids about money. Instead, look for teachable moments, opportunities to build little money lessons into your daily lives. They’ll crop up naturally, because we’re always transacting, even if most of it now happens digitally.
For example, when you’re grocery shopping, talk about how you pay, using either your debit card, buy now pay now, or credit card, buy now pay later. If you tap your phone to pay, explain what you’re doing. If you get creative, you’ll find teachable moments everywhere. One family I know used their home renovation as a lesson in budgeting!
Speaking of budgeting, a financial trend that’s trying to break the taboo around talking about money is “loud budgeting”, being honest and open about what you can and can’t afford.
In honour of Financial Literacy Month in Canada, we have updated our map of financial literacy in schools. Some provinces now make financial literacy a requirement to graduate! The Wisest Investment is a great resource for parents and children, to ensure students get the 70% they need to pass the test and graduate. (In case you’re wondering, in the US, Financial Literacy Month is in April.)
Coming up!
On Thursday November 7 at 11 am EST, I’ll be joining Advocis to talk about why financial literacy is a financial advisor’s secret weapon. You’ll discover how financial literacy can help you support clients more effectively, foster deeper trust and drive long-term success.