How to help your kids learn about money: Advice for financial education

When it comes to teaching young people how to be financially responsible adults, the most important thing is to talk to them — often and early.

That's according to Gary Rabbior, the president of the Canadian Foundation for Economic Education, who's in St. John's Wednesday for Talk With Our Kids About Money Day.

We tell them, if you made mistakes that often makes you the best teacher.- Gary Rabbior

"The departments and ministries of education, educators across the country are recognizing that it's important and they're trying to do more to help prepare our kids for their financial futures," said Rabbior.

Events Wednesday include a money fair, which Rabbior said is the same as a science fair, but students have to research financial topics instead.

About 6,000 schools across Canada take part in the financial literacy day — April 26 is the day for Saskatchewan and Newfoundland and Labrador, while it was marked on April 19 in other provinces.

Changing behaviour

Rabbior said what they're trying to do is change the way young people think about money in the long-term.

"A lot of what's going on in financial education now is we're evolving to try to actually affect behaviour almost as much as knowledge," he said.

"People have been told to budget for decades, yet still a minority of people tend to budget. What we're hoping is the activities in financial literacy education can actually affect the way young people act and how they behave."

A big part of that is encouraging discussion between kids and parents, and equipping families with tools to help make talking about finances a natural discussion.

Encourage them to set their sights on something, actually achieve it and feel how good that feels.- Gary Rabbior

"Don't sit your kid down at the table and say, 'We're now gonna learn about money.' Try and make it a natural thing," Rabbior told CBC's St. John's Morning Show.

"A lot of parents are reticent about doing it because parents often feel, 'What did I learn about money in school?' because most parents didn't. And maybe they made mistakes. But we tell them, if you made mistakes that often makes you the best teacher."

Equip them with skills for the future

As for what parents can do to get their kids thinking about money early is, give them a chance to handle some of it.

"One of the things we think is most important is to have young people build a sense of self-efficacy, and what I mean by that is that they have belief in themselves that they can accomplish the goals they set," he said.

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"The more you can fuel that feeling that, I can set a goal and I can achieve it, then they'll plan for their financial affairs, they'll take control of their financial affairs, so encourage them to set their sights on something, actually achieve it and feel how good that feels."

Building this confidence in handling one's own finances early in life will mean an adult who is more capable of making decisions, and not letting anyone else set limits for them.

"There are going to be a lot of people in their lives trying to affect and influence what their decisions are. The most important thing about staying, I think, out of stress is to stay in control," said Rabbior.

"I think when you get into the decisions about needs and wants and when people start advertising at you and when people start offering you debt and whatever, are you going to let them determine more about what you feel, what you want, what you'll spend? Or are you going to stay in control of your own life and set your own limits?"