School is out, and the summer is here, but the learning is not over yet! Each day is a new opportunity to teach skills, including the basics of financial literacy. Although Canadian schools have started to teach financial literacy in the classroom, a 2018 study from the Organisation for Economic Co-operation and Development in Canada suggests most students get information about money from their parents.
To ensure that your children develop the financial skills they need to thrive, you may want to implement financial literacy activities into their everyday lives. Whether it is specific money games or spontaneous lessons while running errands, there are plenty of opportunities to teach simple math and money matters.
This article discusses five different activities you can implement into your children’s lives to promote financial literacy.
1. Playing money games
Many kids learn best by doing. For this reason, games are a great way to teach your children about money. Thankfully, there are a plethora of money games available. You can test out a bunch of different games and determine which your kids like the best. Below are some ideas for your family.
- At-home activities: Shop or restaurant games involving bills and coins (real money or play money), matching the coins to the name game, or value games (where the child has to trade four quatres for a dollar or two nickels for a dime)
- Online money games or apps: Learning Money with Leo, Peter Pig’s Money Counter
- Board games: Monopoly, Exact Change Card Game, Life, The Allowance Game
These are just a few examples. There are many great money games for all ages.
2. Buying with a budgeting
Now and then, your kids may come into some cash they can call their own. Perhaps they got some money for their birthday, a holiday, from the tooth fairy, or their allowance.
When your child has some pocket change, help them find something they can reasonably afford. It could be anything from clothes to toys or candy, but be sure to let your child decide what they want to buy. If the item they pick out costs more than what they have, you can give them the option of saving up for the item. You can also teach them how to look at the price tag and determine what they can afford.
Not only will your kids enjoy choosing what to buy, but this activity can also teach your child how to budget and plan before they make an expenditure.
When you go into a store or online to purchase something with your child, there’s the opportunity to bring up taxes. Your child might think they can afford something based on the price tag, but they need to pay taxes on top of the sticker price, as you know. If you can, teach them about the tax rates in your province or territory and how to figure out what the total with tax will be.
In Ontario, for example, the Harmonized Sales Tax rate is 13%. Let’s say the item your child wishes to purchase is $12.00. Show them how to multiply the price tag ($12.00) by the tax (1.13) to get the total value of $13.56.
3. Segmenting savings
Part of the budgeting process is saving. When your child earns money, help them save in addition to spend. After all, managing money is about planning for the future and enjoying what you have, which can sometimes be a tricky balance.
The important concept to get across is how to allocate earned money. A portion of the money will go toward spending, and another will go toward saving.
To mimic the bank, provide your child with two distinct piggy banks (chequing and savings). When it comes time to give your child their allowance, make sure the cash can be separated into two portions, whether it’s an equal amount of another value that you decide. Have your little one deposit the money into each “account” and track how much they have. Add “interest” into the “savings” piggy bank and explain how that money is growing.
At some point, you will want to help your children open their own savings account. The best youth accounts have both chequing and savings options. Eventually, you can deposit the money into their account and continue with the activity.
4. Setting financial goals
It’s never too early to think about financial goals and start working toward them. Ask your kids about the big goals they might have. They might say that they want to buy a new bike, save for a trip with their friends or create a university fund – kids can surprise you!
Whatever it is your child wants to save for, be supportive of their goal. The idea is to teach them how to work toward achieving it. Financial goals go hand in hand with saving, so help your child determine how much they need to save periodically. To make it more fun, you can get a large poster board and draw an outline of the item. Divide the image into increments and assign a monetary value to each section. As your child saves, they can colour in the amount they have. They will also see how much more they need to save.
Once the image is wholly coloured in, you can take them to buy their goal.
5. Learning on the go with family and friends
As you’ve probably realized, kids are pretty observant. Teaching your kids about earning and spending can be as simple as giving them a chance to observe the process. There are ample opportunities to do this even as you are running to the supermarket, as you plan a vacation, or send them off on a fun day with friends.
For earning, you could host a garage sale, set up a lemonade stand, or work together to raise money for a charity. These settings can be an excellent opportunity for your child to experience the process of working and visually seeing how much money they earn.
On the contrary, take your children with you when you go to the grocery store, mall or on errands. They’ll learn a lot from you simply by observing your spending habits. If you stop for parking, have them help you feed the metre. If you need a drink, show them the value on the vending machine and get them to count out the coins you will need. If you send them on an outing with their favourite aunt, give them a few bucks for ice cream and then follow up on how they used the money at the end of the day. If they have an amount left over, suggest they save it. Instilling these positive financial habits early can make them second nature in adulthood.