Preparing children for the time when they will assume the responsibilities of wealth is one of the greatest gifts a parent can give.
“Remember that the buck starts and stops with you,” said Dennis Tew, father of three and chief financial officer of Franklin Templeton Investments Corp. “Boys and girls model their behaviour after mom and dad. In many ways, you are the blueprint for their financial futures.”
Take these steps to help make your kids money smart:
Allowance. A consistent allowance is a hands-on opportunity to manage money. Use the child’s age to set the amount—a six-year-old may receive $6. Encourage your child to divide the allowance into three areas: saving, spending and charity.
Banking. A bank account is a great tool to stress the importance of saving. When your child is young, open a bank account for them and have them contribute their birthday money to it. When they are a bit older, review their online statement with them.
Investing. Review your child’s Registered Education Savings Plan (RESP) statement with them and explain how their investments are performing. It’s an easy way to teach them the benefits of long-term financial planning. More information on education planning is available at www.franklintempleton.ca.
Employment. Having a part-time or summer job by age 16 is a major step towards building economic self-sufficiency. Let them experience a minimum wage job and payroll deductions.
Author: Keith Damsell