Canada | Finance

How to prepare your kids for a healthy financial future

CPA Canada study shows Canadians are talking to their children about finances. Here’s how parents can lead by example to instill good habits.

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A mother and daughter sitting at a table and counting coins with a calculatorAccording to the CPA Canada 2018 Canadian Finance Study, 61 per cent of participants reported teaching their kids about money in the past five years. (FatCamera/Getty Images)

When a child wants something—and a parent doesn’t want to buy it for them—they tend to believe it’s as simple as a trip to the ATM, points out Robin Taub, author of CPA Canada’s A Parent’s Guide to Raising Money-Smart Kids.

“However, kids need to understand where that money is coming from and, quite often, parents are the primary source of teaching their offspring financial literacy skills,” she says. 

And that education is starting at home, according to the CPA Canada 2018 Canadian Finance Study. The survey indicated 61 per cent of participants reported teaching their kids about money in the past five years. In fact, almost half the parents surveyed, who have adult children, scored their child an eight or higher for money management skills.


However, a 2018 poll from CIBC shows that many Canadians still aren’t confident about their own finances and, in turn, are feeling less inclined to talk regularly with their kids. The idea that many Canadians still have lingering financial anxiety is further illustrated in the CPA Canada study. Judging their personal finances skills, 49 per cent of participants gave themselves a grade C or lower and 23 per cent plan to carry over credit card debt to the following month. [See Canadians concerned about the future of their finances, says study]

Parents first have to get their own financial house in order so they can lead by example, says Taub. “Parents often don’t have the confidence in their own ability,” she notes. “They feel like they don’t have the knowledge and, as a result, they don’t talk about it regularly.”


Kids watch and listen to the way their parents handle money so, even if you avoid the topic, your children are learning habits—both good and bad—from you.

“You want to be the resource who your kids go to,”  Taub says. “There are good outcomes for kids who do learn these skills at home.”

In A Parent’s Guide to Raising Money-Smart Kids,Taub provides practical suggestions based on the age of the child.

“Engagement is key,” she says. “So talk to them in an age appropriate way. They’re only going to care about things that are relevant to them at that stage of their lives.” 

Taub suggests looking for those teachable moments day-to-day. When grocery shopping, talk about comparison shopping, method of payment, and the difference between cash and credit. When discussing what you do for a living, explain about earning money, education and how that impacts your future earning potential.

“Start early and lay the foundation,” Taub says. “Reinforce that you have to earn money, and then you can decide how to save, spend, donate, or invest.” 

Getting help is important too. There are experts you can speak to, as well as podcasts, videos and books on the subject. [See Money in the piggy: Tips for teaching children about money at home for more advice]

“There are so many ways you can educate yourself,” says Taub. “The more time you put into it, like anything, the better you’re going to get at it.”


Did you know? Canadians have a mixed outlook of their personal finances—read the full CPA Canada 2018 Canadian Finance Study.