Mother’s Day took on a whole new meaning for me in 2012. In ecstasy as soon as I woke up in front of the sweetness and beauty of my son, I then realized that it would be the first time I’d be like honoring my wonderful (best!) mom. I received roses, wine and gifts. Enough to make me instantly embrace said celebration! Being a mother, at least in my own home, has since meant constantly answering questions. For all the moms (and all dads) who play this role, I thought I’d share a few words from the kids, which were carefully jotted down in my notebook. Because, yes, kids sometimes talk about money.
But what do children ask about financial resources?
Before writing my first column last year, I had polled Téo and Éloi, ages 9 and 7, about what they thought were good questions to address to help my readers He should. Here is what they asked me automatically (these are their full words):
“What is the value of money?” The difference in the value of money between countries?
“What is the point of keeping money and not spending it all at once?”
What is the point of having accounts in different banks?
Why do people spend their money and not “collect” it?
How long does it take to pay off the mortgage? Do you have the full amount?
Their questions surprised me. They were much more technical than I could have imagined. As a finance professional, I am of course well equipped to answer. I chose to give them a lot of information, which of course resulted in many sub-questions … For example, I explained to them that the value of a currency depends on several factors, including supply and demand for our country’s products and services, prevailing interest rates and economic conditions compared to other countries other. Since kids love concrete examples, this kind of explanation can be accompanied by calculating the cost of a Canadian dollar dinner in a restaurant as part of a trip to Europe.
The reference to “raised” money is totally cool. My kids still don’t understand why our budget is limited. Then I explained to them, often repeating the importance of financial education, both in school and among adults, that not everyone is fortunate enough to get personal advice from a financial planner. As a mother, I’m constantly giving the message that you should never trust appearances: It’s entirely possible to look “rich” once you’re in debt, and diligent savers, conversely, aren’t always the ones with the highest incomes (although that helps, let’s not We’re naive, too.)
So, if they’re really looking to work for pocket money, we’ve often discussed that they’ll also have to set savings goals for a portion of their income.
Some tips for financial education
These questions also prove that no matter their age, children have the ability to take care of finances. As a financial planner, I sometimes hear parents sigh that their offspring are spending lavishly, or that they are “too expensive.” This relationship with money is not innate or biological…Children must be made aware of the value of work and savings through their role models. So the challenge as parents – another one, that’s right – is to find the balance between talking about finances with them, without communicating our financial concerns to them, if that is the case, or talking too much about them.
Just as with marital discussions about finances, your discussions on this topic with your children should be based on an emotionally detached approach. I don’t think there is a minimum age to start this conversation, you only need to adapt the level of language and the examples given for the answers. The important thing is to sow the seeds of financial responsibility early. Here are some keys.
The famous piggy bank. Still working with children. This is a very tangible way to pass on the management of the accumulation of money to them instead of spending on physical non-durable goods or famous sweets! However, this gesture must be accompanied at some point by calculating the contents of the “treasury” and opening a bank or investment account.
Open the RESP file. It is an unbeatable gift for your children and affordable for all families. You can deposit your children’s savings there and gradually educate them about the growth of their investment. You can open a RESP they can access and keep one larger that they don’t even know exist, if you’re not the open type.
Learn to say no. The consumer society we live in puts a lot of pressure on us to invite spending, but you must remember that saying no to expenses or following your budget is the right example to set, even if your parents’ heart wants the opposite. Children should grow up understanding that some desires should be postponed.
Get informed and inform them. Financial literacy and education tools are becoming increasingly available online. If you, as parents, know that your financial knowledge is limited, you would set a great example by surrounding yourself with professionals and seeking advice. For example, you can take a financial literacy course online and with your family!
Take them with you. Children are always welcome in our company, and perhaps this is the case with your special advisor. Talking openly about your financial decisions and savings in front of your children and presenting them with the family budget (of a certain age) can only reinforce the importance of discussing money.
We’ll return in a future column to these family conversations about finances. For the record, I didn’t answer the last question from my kids. What do you think?