Financial Literacy Month may have already passed but it is probably more important now post-Christmas.
Obviously as a Member of the Legislative Assembly, I am concerned about the big picture when it comes to finances, but as a parent I recognize, that like most other values, it all starts at home.
In a recent conversation over the holidays, I noted that kids today don’t see us handling money like our parents did. Largely gone are the days of taking a paycheque to the bank to cash it, or dad and mom paying cash when taking the family out for ice cream. We have largely entered a digital world of online financing. We get paid online, pay bills online and reconcile our bank accounts online and usually long after the kids are in bed. According to a study by the JumpStart Coalition for Financial Literacy only 26 per cent of 13- to 21-year-olds said their parents taught them how to manage money.
So how does it start? In my own situation my kids are young, too young to get jobs but they do get an allowance and birthday money, so we started by opening them bank accounts at the local credit union. They have set up lemonade stands in the summer and asked about odd jobs they can do around home to earn extra money. With this base they have been able to set goals for those larger "wants," usually something electronic it seems. More importantly, they have an idea that once that purchase occurs the impact on their accounts will be immediate and it may take several months to get their bank balance back to where it was previously.
We can also involve our kids in finances when we are just out and about, at the grocery store for example. We can ask them to help plan a shopping list to get them thinking about how much products cost. They can sift through weekly flyers to try and find items on sale; maybe they cost less at one store as opposed to another, maybe there’s a way to save by buying in bulk.
But it is equally important that we talk to our kids when we make purchases using Interac or credit cards. They need to be reminded that tapping a piece of plastic is not the end of the transaction but only the beginning. Kids need to have an understanding of the consequences of overspending or not paying off their bills at the end of the month. Because before you know it our kids will be finding themselves in college or university, and those credit card offers (along with exorbitantly high interest rates) come fast and furious.
Another component we can teach our kids early when it comes to money, is the idea of giving back. Making a small monetary donation to a cause they feel connected to, or actually donating their time volunteering will have lifelong implications. Not only does the organization get value, but your child can get a better appreciation of where their money goes and what it can do to help. Research proves that individuals who volunteer as youth are much more likely to volunteer as adults and contribute more, monetarily, to non-profit organizations.
If you would like more information on financial literacy, the Manitoba Securities Commission offers an excellent resource: www.makeitcountonline.ca/msc/parents/index_en.html
Please feel free to contact my office on this or any other matter at 204-736-3610 or firstname.lastname@example.org