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If You're Not Teaching Your Kids About Finance are you Setting Them Up to Fail?


Ok, I will admit to the super click-baity title of this piece but I wanted to get your attention because I think that this is a very important topic and one that could set your kids up for success as adults.


Over the last few years Canadian education policy makers have started really looking in to teaching financial literacy at the high school level but the countries that really have a grip on this stuff start much sooner.


In Denmark, Norway and Sweden, where financial literacy is highest in the world, the subject starts in primary schools. So, a 6 year old from Norway could probably balance your cheque book ;) (for your Gen Zeds out there, a "cheque book" is a week book you carry around with you to keep track of purchases...ask your grandma!)


Anyway, I digress. By teaching skills like budgeting, investing, saving and debt management from a very young age kids in those far off lands are learning life skills that will save them the heartache of learning that stuff the hard way!


I don't think we're too far off here in Canada though. According to this article in the National Post Canadian education boards are starting to take real steps in introducing financial literacy into the curriculum.


While some provinces, like Alberta, seem to have gotten the memo that this needs to start in primary school others, like Ontario and Newfoundland, are focusing on secondary school students.


In countries where financial literacy is high the education starts young....like YOUNG! A few of the ways this helps is that little kids are often more excited to learn about cool stuff like money. They're less likely to be spending money they don't have (because they don't know how to access it) and learning these skills can make a bigger impact when taught early on.


In the old days our parents taught us about finances by giving us an allowance (I didn't get one btw. sigh) but one of the things that teaches kids is that they should get paid to do everyday things rather than understanding that loading the dishwasher is contributing to the collective chores of the family. i.e if you dirty a plate you clean it. You don't get paid to clean it. By tying everyday chores to financial gain we're not teaching kids about responsibility. IMHO. Others may disagree.


Schools and parents should, instead, show kids how money is earned in the real world and how it's allocated. For example, 10% of every penny earned should be in vested (the 10% rule). When you invest 10% of everything you earn into a long-term investment you will learn to build wealth. Watching your investment portfolio grow, even as a kid, should produce some sort of cool chemical boost in the brain. "If I keep this up I'll be rich!!" This would also be a great opportunity to teach kids about compounding interest. It's so fun!


A couple other things to consider, particularly if you missed the boat and your kids are now older and about to head out on their own; every penny you earn through investments in your 20's will pay off greatly in your 50's.


There's nothing the stock market or bond market or any other investment source likes more than time! The more time your money is invested the better it will look when you need it.


Even though my own dad was a financial advisor I didn't take this advice. I didn't get into investing until my 40's thinking that it was all too complicated and not something I could do. What I learned was you can start an investment account with any amount of money. (I mean, definitely don't follow me for stock advice. I'm not the best at picking them ;)


Talk to your kids about investing. Talk to them about finances. Don't be secretive about things like our parents were. Everything you share with your kids about finances will pay off in the future. After all, if you're like me and expect them to pay for you to live in the lifestyle to which you've become accustomed in your retirement, it's in your very best interest to get them thinking about it now!


Disclaimer: I am not a financial advisor. This piece is opinion only and a commentary on the Canadian education system curriculum. My license is in real estate and that is where I can help you, and the kids, have a real impact. Don't come at me for stock advice! ;)



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