Do you want your kids to steer clear of the money mistakes you made? Do you want them to avoid credit card debt and living paycheque to paycheque? Do you want them to feel good about money?
If so, you're not alone. Also, you should probably read Gail Vaz-Oxlade's book Money-Smart Kids. It's a quick, practical read that'll teach you strategies you can implement right away. Gail is all about teaching kids how to become purposeful savers and mindful consumers, which is a mission we can get behind!
The importance of starting early
Most of us agree that teaching our kids about money is important, but few of us feel confident when it comes to actually, well, teaching our kids about money. It seems like a dauntingly large task and we often don't think we'll be good at it because we're not always "good with money" ourselves.
Gail helps remind us that we don't need to be perfect, but that we do need to start. Modelling the behaviour we wish to see in our kids isn't enough, we need to take an active role in teaching them about money. We need to let them practice, fail, and learn from those failures. And with so much to learn, it's best to start early.
As Gail says, "The best place for kids to learn about how money works—and the role it should play in their lives—is at home." Gail says it's all about engaging in conversation, sharing ideas and experiences, and reinforcing positive behaviour.
However, deciding what to teach to your kids and when is hard. This book provides a guide to specific money lessons you should be teaching at every age.
The book is broken up into the following categories (making it easy to jump around and go back to reference!):
"If you want your kids to learn about money, you've got to put some in their hands."
Gail is adamant (as are we!) that money can't just be a thinking exercise, it's got to be a practical and hands-on one. This is why giving your kids an allowance is so important. However, giving your kids money and teaching them how to use it responsibly are two different things.
Gail shows you how to use an allowance as a tool to teach your kids money management skills, the importance of establishing priorities and values, and financial self-responsibility. She gives practical advice on deciding how much allowance to give and when, and whether or not you should tie it to chores or schoolwork.
2. Ages and Stages
"Parents underestimate what their kids can understand, sometimes because they cannot conceive of giving up any control."
As our kids grow so should their allowances and financial responsibilities. Gail reminds us that if we want our kids to be responsible, we have to treat them with respect and give them room to try, fail, and learn from those failures. She breaks down financial responsibilities and money skills you should be teaching at every age.
We love that she included prompts to help your kids question things they're considering buying so that they can make their own best decision, as well as her advice on why you should be open with your kids about how much things around the house cost.
"All it takes is a little time and a thoughtful approach to help your children see credit for what it is: useful when used correctly, deadly when it isn't."
There's a lot of people who think credit cards are bad and therefore don't want to teach their kids about them, but sheltering them won't do them any favours. It's only a matter of time before your kids are offered one so you may as well be the one to teach them about the power and pitfalls of credit.
By teaching them about credit before they have access to it you're setting your kids up to make educated and empowered choices. Gail gives a variety of practical ways to teach your kids about credit cards and loans at home, including creating your own DIY credit card and contract.
"How can they value what they've never had to work hard to have?"
Saving up for bigger purchases teaches kids about prioritization and trade-offs, two lessons that will serve them well in all areas of their lives. Like anything else, saving and paying yourself first are habits that need to be practiced. Gail gives advice on what to do if your child is a natural-born spender and has trouble saving money, and what do to if your child is a natural-born saver who needs help spending their money and feeling good about it.
"If you don't want your children to fall into the consumeritis trap, you need to help them distinguish between the things that are Must-Haves and the things that are Nice-to-Haves."
Teaching your kids how to be conscious consumers is incredibly important. But with all the advertising kids are exposed to these days and social media looking more and more like one big comparison trap, it can feel like an uphill battle. Gail explains relative value, teaching the difference between wants and needs, and how to help your kids fend off the compulsion to shop.
Good money management is a skill set
As you can see, money management really is just a bunch of different skills that need to be introduced, practiced, and reinforced. Like most things, the hardest part is getting started. If you're feeling stuck this is a great quick read that'll give you the confidence to move forward.
And remember, when in doubt keep it simple!