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With kids, the money talk is like the sex talk

Jennifer Kwan
Pay Day

From potty training to punishment, parenting expert Alyson Schafer has been asked about it all, and one common topic is kids and money.

"When do I start allowance, how much do I give them, should I tie it to chores? It's amazing to me that there's this eagerness and that they're completely overwhelmed by it," says Schafer, who is a psychotherapist by training. Overwhelmed in that the topic, for many parents, is a lot like talking about the birds and the bees.

"Talking about money is like talking about sex. They're the two big taboo topics," says Schafer. "Money is not just about the concept that four quarters makes a loonie. Money is also about power, it's about status, it's about control. It's laden with all these other things."

A poll released by Bank of Montreal this week showed the vast majority of Canadians, 99 per cent, agree it is important to develop good financial habits early in life. But only 18 per cent of parents spend a lot of time discussing money management with their kids.

Comparatively, parents spend significantly more time talking to their children about school, 62 per cent, their hobbies, 50 per cent, their friends, 47 per cent, and their future, 37 per cent. Overwhelmingly at 96 per cent, Canadians think teaching financial literacy will contribute to personal and household financial stability and help the Canadian economy, BMO says.

"Ensuring Canadians are armed with the knowledge and resources to become financially literate is key to the financial well-being of families, as well as the overall economy," says Jacques Ménard, chairman of BMO Nesbitt Burns and vice-chair of the federal government's Financial Literacy Task Force.

Understanding the concept of money, personal finance and encouraging broader financial literacy early on through home and school activities is part of a recently-launched project by the Canadian Foundation for Economic Education.

April 17 is the first annual “Talk With Our Kids About Money Dayand the initial focus will be on Grade 7 students. The project, which is funded by Bank of Montreal, will have two key components.

The school program will be rolled out in the Toronto and Montreal areas, and will expand across the country over the next three years, while the public will be able to access the online home program of resources, tools and activities.

It is hoped the program will help Canadian families talk more about money by ensuring the topic is prevalent in classrooms and at home. Indeed, the project comes at a time when politicians and policymakers have been waving red flags about soaring Canadian debt levels.

Schafer taught her kids about the concept of money when they were pre-school aged, giving them an allowance that was usually spent on a snack after swimming lessons.

"When people hear my kids had an allowance when they were three- and four-years-olds, they're like are you out of your mind? What does a three-year-old need an allowance for?" she says.

"It meant I had to give them money. They had to put it in a piggy bank. They had to remember to bring it with them. Sometimes they'd forget; so there was a lesson. Or they'd lose it. There was another lesson ... Finances is just one of many things about responsibility."