How to talk money with your kids

Whether your kids are heading off to college or university or just starting elementary school, it’s important to talk with them about money.

Whether your kids are heading off to college or university or just starting elementary school, it’s important to talk with them about money. Talking about money with children is often an area where parents lack confidence, but Bruce Sellery is here with advice on how to best approach these conversations.

College- or university-aged children:

Start with a budget

“A budget is a great tool for students,” says Bruce. Having a budget will help them make informed decisions when it comes to how much they are spending since they can see where their money is coming from and where it is going. Remember, it is the student (not the parent) who is making the budget.

To make this budget, your child will add up all the expenses such as tuition, books, food, transportation and even beer. Next you add up all the income scholarships, part time job, RESP and money from parents. It’s important to make this budget for the entire school year, from September onwards. “Ideally there is a surplus and not a gap,” says Bruce, however, if there is a gap, he recommends asking your child what they will do about it. Are they willing to get a part time job or cut expenses or are you, as a parent, ready to supply the additional funds?

Set expectations

As a parent to the child, let them know what will happen for their expenses. Establish boundaries and stick to them! Tell them what you will pay for and what you won’t pay for, what will happen in emergencies, what happens in terms of duration, and lastly, the conditions.

Younger children:

Talk about money in a positive way

“One of the things kids need to learn is that money is scarce,” says Bruce. It’s important to include your kids in the conversations. For example, at the grocery store you can give them a choice between two items to help teach them that they can’t have both.

Teach them about spending through an allowance

An allowance is a great tool for teaching young kids about money. Make sure you give your kids an allowance and let them spend it however they like. When it comes to an allowance, be sure to teach them the importance of having an intention when spending their money.