Four Fun Ways to Teach Kids About Money
Unfortunately, it’s not good enough for parents to simply model responsible money habits and call it a day. While the vast majority (86%) of Canadian parents believe they’re good role models when it comes to financial planning, more than half (51%) of their college-aged kids asked them for a hand out because they ran out of money, a CIBC poll found.
So, what’s a parent to do? First, if you don’t already give your child an allowance, start. I began giving my son a toonie a week when he was four so he could start to learn what money is, how it works, and what things cost. As he got older, we increased the amount. It’s amazing how quickly kids become interested in a subject once they have a stake in it.
Next, look for age-appropriate teachable moments to talk about finances while having fun. Here are four suggestions to get you started.
Play a Game
The classic board games we grew up with, such as Monopoly, Payday and The Game of Life, are all excellent ways to begin a conversation with your kids about money because they include concepts such as income, expenses, insurance, stocks, risk, taxes and even philanthropy. There are now also “junior” versions of these games to appeal to younger children.
For kids who are more into video games, Animal Crossing is a great option. It’s a cute, age-appropriate life simulation game, where players get to work at Tom Nook’s shop, earn bells (the game’s form of currency), make mortgage payments, then take out a second mortgage or loan to expand or renovate their house. My son started playing this game when he was eight, and it wasn’t long before he started asking me to explain “de-B-t” and excitedly telling me how much of his mortgage he paid off. He was just having fun; it never occurred to him he was learning!
You can also find free online games and apps that focus on finances, such as Ayiti: The Cost of Life (age 8+). Players take on the role of a poor child in Haiti and must manage a rural family of five over four years.
Read a Book
There’s a long tradition of children’s stories teaching lessons about saving or other financial themes — going as far back as Aesop’s The Ant and the Grasshopper. (For those who need a refresher, the ill-fated grasshopper plays all summer while the ant works hard to store up food for the winter.) Here’s a selection of children’s books about money to consider, or you can ask your local librarian for suggestions.
For superhero fans, there’s a Marvel comic book, Guardians of the Galaxy: Rocket’s Powerful Plan, that teaches kids about money. Produced in conjunction with Visa, it features the motley crew of Guardian characters (Rocket, Groot, Star-Lord, Gamora and Drax the Destroyer) along with special appearances from Ant-Man, Iron Man, Thor, Black Widow and Hulk — with many financial concepts baked into the plot. There’s also a handy list of financial terms and a few money-related puzzles and games; it’s available for free online.
Of course, books don’t have to be specifically about money for you to find teachable moments. If, for example, your child is into Harry Potter, you could start a discussion about money whenever Harry visits Gringotts Wizarding Bank. Ask kids why they think Harry withdraws only as much money as he needs, and doesn’t spend everything his parents left for him on candy and butterbeer? There’s their first lesson on needs vs. wants.
Watch a Movie
Speaking of Harry Potter, many films have money lessons you can pick up on and discuss with your kids. The original Star Wars trilogy, for example, shows that unpaid debts are bad news (Han Solo is frozen in carbonite and sold to Jabba the Hutt when he can’t pay up), and that friendship, loyalty and love are more important than monetary rewards.
Some movies to consider that are more specifically about money include:
- A Little Princess (rated G) – Seven-year-old Sara must become a servant at her boarding school during World War I when she learns her father died. Despite her hardships she continues to believe she — and all girls — are princesses, just as her father taught her.
- Millions (rated PG) – A young English boy and his older brother try to decide what to do with a bag they find containing a pile of stolen cash.
- Catch Me If You Can (rated PG-13) – Steven Spielberg’s entertaining account of Frank Abagnale, played by Leonardo DiCaprio, one of the biggest fraudsters of all time. The law eventually catches up with Abagnale, proving there are no shortcuts to wealth.
- Maxed Out (documentary) – An examination of the effects of debt on individuals and families. It’s serious content that’s best for teens, especially high-schoolers who will soon be heading off to university or college.
A strategic visit to the grocery store can introduce younger kids to basic money concepts. Show your child how to compare prices and let them choose one item under a certain price — you’ll be surprised how seriously they take this responsibility once you give them some agency to make decisions on their own. Take cash with you and let your child pay for his or her purchase at the checkout and count out the change to become familiar with the values of the various coins.
A trip to the mall or dollar store can be a great setup to discuss the difference between needs and wants — a critical financial skill that will help your child in the future when it’s time to create a budget. Online “window” shopping can also be a fun activity to teach kids about finances. Look up items they are interested in and see how much they cost. To really drive the lesson home, figure out how many weeks’ allowance they’d have to save up to buy those items.
Draw teens into a conversation about credit by asking them to guess how long it would take to pay off the latest iPhone if they charged it to a credit card and made the minimum payments only. Chances are they won’t guess correctly: it would take a full decade to pay off the balance and would cost them nearly double the original price of the phone, including all interest payments.