By Yvonne Sam
Various surveys have shown that many Canadians exist, from paycheck to paycheck, have little saved for retirement, and lack basic financial knowledge. Experts claim that part of the problem lies in the fact that financial literacy has not been highlighted in Canadian education.
Quebec has a mandatory Sec. V financial program, and in Ontario financial literacy is a major component of the required learning in the revised Grade 10 Careers Studies course — a mandatory course for all secondary students in Ontario. Beginning in 2019, financial literacy played a larger role in the curriculum of Ontario schools.
Be that as it may, if parents want their children to learn the value of money and how to avoid financial problems as adults, then education has to start at home. When children comprehend their parents’ financial situation and gain an understanding of financial literacy, they are more likely to appreciate the gifts they are given, or are not given — and the reason why.
Blatantly harsh, or succinctly morbid, as it may appear, teaching a child to be financially literate will greatly assist them in understanding that they have to take personal responsibility to be financially secure, when mom and dad are no longer there, to put the food on the table for them.
Parents can minimize their teaching of financial literacy by handing out spending money, whenever their child needs something. In order to learn good financial skills, “work needs to be taught”.
Children learn they are rewarded for effort, not just for showing up. With their fixed amount of money, they can be taught what they will have to do as adults – divide it up for bills, spending money, and savings – and that it does not grow on trees every month.
A lesson on saving and staying out of debt
A good way for children to learn about debt would be to show them how a loan would work, with the parent being the lender. Let the child/children think of something that they would like to purchase, but for which they do not have enough saved already.
There are two options available: the parent can now offer to help them make the purchase much earlier than continuing to save for it, but only in exchange for a loan payment that would be made, by reducing the amount the child receives for chores. In this way, they would learn how debt consumes their earning power. Parents have to instill in their children that savings is not an option, but rather a necessity, so that people do not become slaves to debt.
To teach depreciation, children can be taught to look at their toys and clothes. Toys wear out. Children’s toys and adults’ expensive items, such as cars, need to be purchased to replace old ones, and teaching an understanding of that principle of depreciation, is essential to teaching your kids why people need savings. They can be further assisted to understand depreciation, by having them compare the prices of toys being sold at a garage sale or a thrift shop, versus the same or a similar toy being sold at a new price in a store.
Children have a lot of years to grow up, and parents can give them years of age-appropriate financial lessons in their own home, that will last a lifetime. Start now, if you have not already.
Yvonne Sam, a retired Head Nurse and Secondary School Teacher, is the Chair of the Rights and Freedom Committee at the Black Community Resource Centre. A regular columnist for over two decades with the Montreal Community Contact, her insightful and incursive articles on topics ranging from politics, human rights and immigration, to education and parenting have also appeared in the Huffington Post, Montreal Gazette, XPressbogg and Guyanese OnLine. She is also the recipient of the Governor General of Canada Caring Canadian Citizen Award.