Sure, we teach our kids how to brush their teeth and ride their bikes, but what about managing their money? Teaching kids financial literacy early encourages healthy spending and saving habits that will set them up for future financial success. Here are some fun and easy ways to introduce your children to money management.

Pre-School and Elementary

Three jars full

This one’s great to introduce kids to the different ways money can be used. Grab three mason jars and label them: long-term (for big ticket items like a new bike), short-term (for a new book or toy) and giving (contributions to a local charity or cause). Your little ones can divide their gift money, allowance, and spare change into the different jars and set goals for each. Piggy banks are cool, but clear jars allow your kids to literally see their money grow. 

Set up “shop”

Put on your imagination hat and open up a “store.” Use plastic fruit, empty food boxes or other household items and exchange them for pretend money. Your toddler will be introduced to the basics of commerce and exchanging money for goods. You can also clip coupons and take them to a real grocery store and have them seek out the sale items. Never too early to start deal-hunting. 

Bank on it

Help your child open a savings account and encourage them to make regular deposits. A CIBC Smart™ Start offers people under 25 unlimited everyday banking, no monthly fees and more. Introduce them to the concept of compound interest and the benefits of keeping money in the bank as opposed to their pocket. Of course, this should be a joint account so you can monitor the ins and outs. 

Middle School

Give Them a Job

Don’t just pay your kids for breathing. It’s important for them to understand money isn’t free–you have to earn it. Teaching kids the value of hard work and responsibility will help set them up for future success. Give them a weekly allowance for completing age-appropriate household chores or errands. Then it’s more like a paycheck than a bonus. They learn delayed gratification and get rewarded for a job well done. 

Give them some credit

Once your kids wrap their heads around the idea of credit, allow them to borrow a small amount of money from you to make a major purchase like a bike or a tablet. Decide together how much your child will repay each week from their allowance. Remember to collect and keep track until the debt is repaid. This teaches accountability. 

Compare and share

Tweens can better understand the value of money and goods by putting on their detective hats and hunting for deals online. Have them choose an item on their wishlist like a laptop or a guitar and task them with finding three different sellers. Sit down with them and talk about the costs, make/model differences and pros and cons of each. Then decide together which option makes the most sense in terms of budget and quality. 

High School and Post-Secondary

When credit is due

When you think your teen is responsible and ready, a credit card can help them build credit history and healthy financial habits. Discuss the kinds of purchases that should be made via credit over cash. Make sure they understand they should only spend what they can pay off each month and can be penalized for not paying their bill on time. The CIBC credit card guide is a helpful resource to help your kids manage their credit cautiously and avoid debt. 

Build a budget

If your teen has a job and their own money coming in, help them set up a budget to manage it. Have them identify fixed monthly costs like tuition, rent, phone bills, utilities, bus passes etc., and variable expenses like groceries, entertainment, clothing and gifts. Make sure their spending doesn’t exceed their monthly income and encourage them to add extra money to their savings account. The CIBC student budget calculator makes it easy to track expenses for the entire year. 

Find free money

There are so many scholarships, bursaries and contests out there that can lighten the tuition load for post-secondary students. Remind your kids they have nothing to lose and everything to gain from applying. Whether it’s winning 4 years’ tuition or earning $10,000 for a great idea, have your teens do some digging towards a debt-free degree.  

So now that your kids can start managing their money, what about yours? Major life changes like starting a family or purchasing a home can have a huge impact on your finances. CIBC Journey Advisors can work with you to create personalized banking and investment strategies today to help you reach your goals tomorrow. Simply book a meeting to start the conversation.