Financial experts obviously know money. But how do they handle money conversations when it comes to their own kids? Cathie Hurlburt, a Vancouver-based financial planner with Assante Wealth Management, shares a few simple ways that she’s teaching her three daughters about money management.
1. She gives them an allowance. How are they going to learn about money if they have none to play with? Hurlburt says how much money you give depends on your own comfort level and financial ability. She pays 50 cents a week for each year they are in age. So, her 10-year-old daughter would get $5 a week.
2. The kids save half, spend half. Half of the allowance and money earned from part-time jobs goes directly into the kids’ respective savings accounts. Hurlburt says such accounts help her daughters to comprehend how the banking system works. They get to see how much money they’ve accumulated, and also learn about deposits and withdrawals. “Kids often see you take money out of a bank machine but they don’t realize you have to put money in to get it out. That’s why I have them put money in.” The remaining funds are for them to spend on whatever they desire. They generally save up for the big-ticket purchases themselves.
3. She tailors her language. Rather than saying “we can’t afford it,” Hurlburt recommends saying, “we choose to spend our money on x and not y.” This subtle change of words puts people of different means on the same footing. Even if money is tight, fact is, we all make certain financial decisions and kids need to grasp that concept.
4. She never loans them money. Doing that just teaches kids to spend more than they have—a lesson many adults have yet to grasp.
How do you teach your kids about money?
Deanne Gage has written about all matters financial since 1999. She writes, edits and strategizes out of her Toronto home that’s partially under construction. Besides money issues, she enjoys running fast, jazz music and drinking a quality glass of Merlot. Her two-year-old daughter is quite familiar with money: she borrows it from mom’s wallet for her toy cash register.