I get so frustrated talking to people who don't know basic things about handling their finances. Now don't get all defensive if you feel like you are in this situation because I'm not mad at you! What I hate is that we don't give people the tools to handle money when they are young. Really, what could be more important than ensuring children and young adults know that going into debt is bad and that starting to save early is essential? Apparently learning advanced algebra and who fought who in WWII are higher priorities.
Just last week Ontario was making headlines because they are (finally) launching a pilot project to incorporate financial education into their schools. Their hope is to create a new course that will be implemented in the Fall of 2018. Obviously, it's still a work in progress, and we don't know what the actual curriculum will be, but it's certainly a step in the right direction. Other provinces across Canada have varying levels of financial literacy components included in high school curriculums, but I don't think there are any that couldn't use some improvements. For example, Saskatchewan has no official financial literacy component included in their schools, but BC and Manitoba have both revamped their math programs to include such topics. Here in Alberta (the only province I have experience as a high school student), they currently have a mandatory 'Career and Life Management' course. I took it, and honestly, it was kind of a joke. Everyone tried to take CALM in summer school because it was an easy two weeks of fun and games, seriously. Part of this for sure is that fact that most high school kids don't worry about money the same way they will 10 years later but it doesn't help that the course itself has such a poor reputation. The one thing I actually remember was going to a car dealership to 'learn' how to buy a new car. Cringe!
So, what can we do?
Obviously, I believe that high school curriculums should put greater focus on financial education and provide kids with tools that will actually help them succeed in the real world, but it doesn't end there. Parents need to take some responsibility too and pick up the slack. The problem with this is that not all parents have good money skills themselves, and sometimes bad education can be worse than no education.
I was lucky to have parents who were positive money role models and picked up a lot from them when I was growing up. Both my parents were professionals (my Dad an engineer and my Mom a physiotherapist), and we were comfortably middle class, but that didn't mean they weren't careful with their spending. Both my parents are Scottish, and I still joke that my Mom fits the bill for the stereotypical cheap Scot.
"Have you heard the rumour that the Grand Canyon was started by a Scotsman who lost a coin in a ditch?"
My Dad was definitely the money guy in the family, in fact, I still remember him spending every Monday night sitting at the dining room table paying bills, balancing the checkbook, working out a budget, etc. Apparently, this left a lasting impression on me, and although I don't balance a checkbook (who uses cheques anymore!), I do keep a detailed account of my budget. He was old school and used the antique pen and paper method, but with all the advances in technology, it is easier than ever to keep on top of your finances. Now you can get everything done through an app on your phone; more efficient...absolutely! But you do still need to put in a bit of time/effort to keep things updated.
Even though I was an only child, I didn't (still don't) consider myself overly spoiled. My parents taught me that I couldn't always get what I wanted and that sometimes they just couldn't afford to spend the money. Was I scarred for life about never getting that pony I always wanted? Hardly (it's still on my Christmas list, though, hi mom). Instead, I learned that I had to work to afford the things I wanted and considering how many hours you have to work to earn 'X' amount of dollars really puts purchases in perspective. My 5-cent candy buying days were sure cut down when I had to spend my own babysitting money. I also remember a very long
Where do you start?
Maybe you are a parent and are wondering how you can instill in your kids a sound basis of financial knowledge. Now, remember, I'm no parenting expert and am only speaking from my experiences growing up, but there are some guidelines you can use to set your kids on the right track.
1. Educate Yourself
You're not going to have much credibility with your kids if your own finances are a mess, so step one is always to get yourself in order. Your good or bad habits will rub off on your children no matter what you do, so make it a good impression.
2. Start Early
Obviously, children have the capability to learn different skills at different ages, and you'll have to hold off on complex subjects to later days. You can, however, incorporate money matters even at a young age. Consider role playing a supermarket transaction or playing monopoly. Anytime they have to give up money for goods will get them thinking about spending.
There's no better way to learn about your priorities in regards to money than to have to spend money you actually earned. This is where an allowance would come in. Younger kids don't have any way to make money (except maybe through Birthday or Christmas gifts), so an allowance can give them that access. I also like the idea of taking them to the bank to set up a bank account. There's no minimum age to set-up a bank account in Canada, and the requirements will depend on your bank, but most of the big banks offer accounts for kids. This way they will have a place to deposit money and watch their savings grow, you can even get them online access to help learn the ins and outs of the banking system.
4. Encourage Working
Nobody likes laziness, so build up a good work ethic in your kids by encouraging them to take on a part-time job. I worked at my Mom's physio clinic from the time I was 14 all the way up until University. Working taught me to be more responsible, how to deal with a variety of people, and gave me an income that let me be more independent.
How did you learn about money? Was it through school or from your parents? And, what the best money tip you ever learned?