Financial literacy for kids
According to the Financial Consumer Agency of Canada’s 2023 survey, fewer than half of Canadian adults describe themselves as financially knowledgeable.¹ So if you’re not sure how to talk to your kids about money, you’re not alone—and you’ve come to the right place.
What is financial literacy?
Financial literacy is knowing how money works, what’s most important, and what to do when things go wrong. And just like playing the piano, or scoring the perfect slapshot, managing money well is a skill we have to learn. While financial literacy is finally part of most school curriculums, teaching your kids about money should still be a part of your every day.
Why to teach your kids about money
One of Canada’s top names in financial education, Kelley Keehn, calls out four big reasons to talk to your kids about money:
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- Habits. Help your kids form good money habits while they’re young—we all know how hard it can be to break bad habits when we’re older.
- Health. Since financial, mental, and physical health go hand in hand (in hand), each of your kids’ good money habits can contribute to their overall well-being throughout their adulthood.
- Experience. Your kids will make mistakes with their money. But low-stakes blunders in their youth give them valuable experience they can tap into as they grow.
- Confidence. Teaching your kids about money can build their confidence—after all, they’re developing a skill, making informed decisions, and learning from the results.
When to teach your kids about money
No matter how old your kids are, they’re the right age to learn about money. As early as age three, your kids notice your good financial habits. School-age kids start to understand the power of a dollar, without necessarily understanding the value of it. Start sharing what you know before they get their first job or leave for university. If you’ve already missed that date, it’s even more important to start today.
What to teach your kids about money
We probably all agree that it’s not super valuable to lecture any three-year-old about credit ratings and retirement savings. That said, every child’s different, so get a feel for your kids’ understanding and interest, then find practical and creative ways to share the value of money, the importance of budgeting, and hazards of social pressure.
The value of money
When your kids watch you tap your card at the grocery store, they’re not exactly getting the full story. No matter the age of your children, they need to know the true value of money.
How can you teach your kids the value of money?
| Key concept | Younger kids | Older kids |
| We work to earn money. | Play at going to work, getting paid, and putting money in a bank account. | Get them to figure out how many chores or work hours it’ll take to earn and save for something special. |
| We spend the money we earn to get the things. | Play store using real money—count coins and make change. | Get them to help you shop—hunt for sales and compare unit costs. |
| When you spend money on one thing, you don’t have it for something else. | Run out of money when you play store. | Help them calculate what or how much they can afford with the money they have. |
| Credit isn’t your money—it represents money you have to pay back to the bank with interest. | N/A | Create a contract that includes a loan to help buy something, the date they’ll pay you back, and the interest that’ll build up until then. |
Budgeting—the 3 jars
To start budgeting with your kids, give them three jars (or three no-fee bank accounts for older kids)—one for saving, one for spending, and one for sharing. Decide with your children how much of their money will go into each.
How can you teach your kids good saving, spending, and sharing habits?
| Budget category | Younger kids | Older kids |
| Saving | Have them wait their turn
Have them wait in line
Talk about what they’re saving for and why |
Help them set short- and long-term saving goals that are meaningful for them
Encourage them to save for experiences, not just material goods
Show them how to sign in to their account to watch their savings grow |
| Spending | Let them decide how to spend their money (a poor choice can mean choosing more wisely next time)
Let them pay the cashier
Talk to them about the difference between what they need and what they want |
Let them budget for some of their needs
Let them prioritize their own wants
Talk about debt—how it can get out of hand, and how a bad credit rating can affect their future |
| Sharing | Help them share their toys
Explain how donating things they’ve outgrown can help a good cause
Share ideas about how to use their sharing jar money |
Share causes that matter to you and encourage them to pick ones that matter to them
Urge them to find creative ways to give and to inspire others to give
Remind them that donating time is just as valuable as donating money |
Social pressure
Social pressure is an important, and often overlooked, part of financial literacy for kids. It comes not only from the other children in their lives, but from the personalities they follow on shows, videos, and social media.
Help your kids see how what they want, or think they need, is affected by what other people have—or what other people tell them they need. It’s important for your kids to understand social pressure for what it is, and to reflect on what really matters to them.
How to teach your kids about money
Like a lot of things, getting your kids interested isn’t about why, when, or what you say, it’s about how you say it.
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- Start slowly, make it fun, and keep it consistent.
- Be open about your mistakes and your worries, and show them that it’s okay to talk about it.
- Put it in their terms and in the context of their life, not yours.
- Set and save for some goals as a family, working together to make them happen.
- Team up to find answers to questions you can’t answer, changing your own habits to show the value of what you learn.
Yearly check-in during financial literacy month
Each November is Financial Literacy Month in Canada. Take it as your cue to start the conversation with your youngest children or continue it with ones who are already learning. Take a little time for yourself too, to brush up on your own financial skills and best next steps.
And remember: You’re the example your kids will look to. It doesn’t mean you have to be perfect. But it does mean you have to be willing to listen, willing to learn, and open about what you know.
1 https://www.canada.ca/en/financial-consumer-agency/programs/research/summary-covid-19-surveys.html
The commentary in this publication is for general information only and should not be considered legal, financial, or tax advice to any party. Individuals should seek the advice of professionals to ensure that any action taken with respect to this information is appropriate to their specific situation.
