Managing Your Money

Money can be a difficult concept for kids to get. Whether it be the more basic concepts of banking, or how credit cards work, to the more complex such as investing, compounding and financial planning. Considering how important financial skills are in life, learning about money and developing good financial habits is one of the most important life lessons children can learn.

The first place that kids will start making connections about money is from observing their environment – parents, grandparents, friends, media, etc.  They will learn and make judgements based on what they witness from others on spending, saving, the value of money, and the importance or non-importance of it.  The best way to encourage good spending habits is to exhibit them.  Get kids involved when planning a trip to the store by making a list together, then sticking to it.  During shopping outings with my children before they could read, it was easy for me to “sneak in” extra items that were “supposedly” on our list (my bad!), but now I’m forced to avoid impulse buying as they keep an eye on me, and my list!

Educational lunch
series running through
October & November

Visit my website at
or contact us at 514-981-5795 for an updated list of topics & dates.

The best way to teach kids about money is by giving them some. That could be through an allowance, birthday gifts, or having them work for it. This will give them the opportunity to make choices for themselves.  The “saving jar” idea is a good basic way to teach kids about the importance of saving, setting goals, and delayed gratification – having a jar for each category – saving, spending, and sharing, explaining the importance of each, and discussing setting a goal for your child to save for a more expensive item.  This could also be a good opportunity to teach them how to research more expensive items, read reviews, compare prices, etc.  Once the item is purchased explain to them that sometimes purchases can be defective, and therefore it’s important to keep sales receipts in case they need to return the item or make a warranty claim.

If your child or grandchild sets a savings goal for a worthy purchase, you may consider encouraging them by paying interest on their savings, or offering some type of grant – like you match every $2 they save with $1, or even a $1 for $1 matching.  This will reward your child’s savings habits.  If you do plan on paying them interest, please be more generous than the banks are these days!

Age and maturity dependent, talk to kids about peer pressure, keeping up with “the Joneses”, and marketing and advertising pressure.  These factors can have people make crazy decisions when it comes to money.  Marketers’ jobs are to try to convince us we “need” what they are selling. There are opportunities around us constantly that we can discuss with kids. While watching a car commercial showing how happy the family is with their new car, find out if your children think that buying a new car makes people happier, or if that particular car vs. another car makes people happier. Explain what advertising is trying to make us think.

A fun exercise for kids that my sister often does is to give kids some money when you’re grocery shopping – she usually gives $20. She sends her kids (age 9 and 11) to choose some snacks they want, without going over $20. They have a calculator, and are forced to make choices, and put things back as they agree on their final order.  Kids often don’t realize how much things cost, and how quickly things add up. Learning that money is a finite resource is a crucial lesson.

When it comes time to give children gifts, why not use the opportunity to teach them about investing. Look at things that they might be interested in, and the companies that make them – Disney movies, Nintendo games, MacDonald’s, etc., and buy them a share or a few shares in a company that they know. They can watch the stock go up (or down) and learn how the stock market moves.

Giving children the gift of financial literacy will help them grow into adults who feel a sense of security and control over their financial lives, something that will be greatly empowering in a generation known for their sense of entitlement and need for immediate gratification.

Important Note:

With the opening of our new Richardson GMP office located in Pointe-Claire, we are pleased to announce a series of educational lunch events hosted by our tax and legal experts. Some of the topics will be:

  • Cyber Security Threats and Ways to Protect Yourself
  • Your Will, Mandate in Case of Incapacity and Power of Attorney
  • What’s New in the Markets
  • The Critical 10 for Retirement Planning

These workshops, and others, will be held at both our Pointe-Claire branch, and our downtown Montreal branch. Please visit my website, under events, for the full workshop series, dates, and locations at or call us at 514-981-5796.

Lynn MacNeil, F.PL. Vice President, Investment Advisor, is a Financial Planner with Richardson GMP Limited in Montreal, with over 20 years of experience working with retirees and pre-retirees. For a private financial consultation, or more information on this topic or on any other investment or financial matter, please contact Lynn MacNeil at 514.981.5795 or [email protected].

The opinions expressed in this article are the opinions of Lynn MacNeil and readers should not assume they reflect the opinions or recommendations of Richardson GMP Ltd. or its affiliates. The comments contained herein are general in nature and are not intended to be, nor should be construed to be, legal or tax advice to any particular individual. Accordingly, individuals should consult their own legal or tax advisors for advice with respect to the tax consequences to them, having regard to their own particular circumstances. Richardson GMP Limited, Member Canadian Investor Protection Fund.

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