Parents have the power when it comes to teaching dollars and sense

Research shows that teaching your kids money skills has long lasting effects.

We’re now well into Financial Literacy month, so you’ve probably noticed many news items with tips on money management and how to teach kids about finances. And, I know some of you are wondering: is it really worth it for me to devote my limited (and valuable!) parenting time and energy to the topic of money?

Here’s what the research says.

Modeling good behaviour isn’t enough

While it certainly doesn’t hurt for children to see their parents behaving responsibly with money, being a good financial role model won’t ensure your kids understand how to manage their own finances. In a CIBC poll, 86 per cent of Canadian parents surveyed say they are good role models when it comes to financial planning, yet more than half (51 per cent) of respondents with children in college/university say their kids tapped them for extra cash while at school last year because they ran out of money. Ouch.

Entrepreneurial spirit starts in childhood

According to a recent poll for RBC Small Business, Canadians who want to own a business engaged in entrepreneurial activities as children, including yard work (49 per cent), shovelling driveways (37 per cent), creating a lemonade stand (22 per cent), painting (22 per cent), selling crafts they made (17 per cent) and walking dogs/pet sitting (13 per cent).

Kids who save become adults who save

In 2011, researchers examined data from an 18-year British follow-up study and found that saving at age 16 is linked to saving at age 34. A more recent study published in Journal of Consumer Affairs this year looked at the financial habits of 470 British students from age 11 to 18. It found those who had become careful spenders by age 11 were more likely to lower their spending to save money — in other words, spend within their means — when confronted with an income constraint. The study’s authors concluded that “adolescents who have learned to budget during childhood may be better equipped for saving during adolescence—and this is likely to carry through to young adulthood.”

Money lessons from parents pack the biggest punch

The same study found that saving is “bound up with the relationship to one’s parents” and, therefore, suggests financial literacy programs be targeted toward children and their parents.


Do you think your kids are benefitting from your money lessons? What changes have you seen in their behaviour?


The views and opinions expressed in this article are those of the author and do not necessarily reflect those of CPA Canada.


About the Author

Tamar Satov

Managing Editor, CPA magazine
Tamar is a journalist specializing in business, parenting and personal finance. She blogs regularly in this space with advice and anecdotes on her efforts to raise a money-smart kid.