Homework, reading, sports practice — a parent’s to-do list is busy even on a good day. But parents themselves say they should make room for one more: financial literacy.
Recent research from TD Canada Trust found that while 97% of parents with children under 12-years-old say it’s extremely important to talk to their kids about money and finances, 42% say they haven’t yet talked to their children and 36% say they find it difficult to find the time to talk to their kids because it’s a complicated topic.
“Financial literacy is an essential life skill that children need to learn to be successful adults. It’s never too early for your kids to start learning the value of a dollar,” says Raymond Chun, a senior vice president at TD Canada Trust. “With patience and a little creativity, even the busiest parents can find teachable moments every day to help their children grow up to be financially savvy adults.”
As with many life lessons, kids learn about finances from the example that parents set in their own life. Nine-in-10 parents surveyed (88%) said they believe that how they manage their finances impacts how their children will manage their own.
“Really think about the example you are setting for your kids every single day when it comes to money management,” says Chun. “How often do they see you shopping versus depositing money at the bank? Do you show your kids that you’re willing to wait and save up for the things you want? Use examples in day-to-day life to demonstrate to your kids that life is about balancing priorities and budgets. Look for those ordinary moments as an opportunity to teach, such as explaining why you bought the milk on sale. Be open about how much things like groceries, toys and vacations cost.”
Don’t let your kids see you dipping into their savings
While most parents wouldn’t even think of touching their kids’ piggybanks, 31% of parents with young kids admit they would raid their children’s piggybanks if they needed some change and couldn’t find the cash anywhere. Chun advises to plan ahead to show your kids organization and discipline when it comes to money management. “I’m sure we’ve all been in that situation where we’ve run out of cash before we can get to the bank. But when it comes to leading by example, we should show our kids that we’re in control of our cash flow. And, if you must dip into their savings, explain to them that it’s only temporary.”
TD Bank Group commissioned Environics Research Group to conduct an online omnibus survey of 686 parents with children living at home, including 453 parents with children ages 12 and under. Responses were collected between November 9 and 13.