Month: March 2021

Children around the age of three begin to grasp the concept of numbers and counting. And by the time they’re starting grade school, it’s a great opportunity for parents to introduce the concept of money. Here’s some fun and simple ways you can teach the ABC’s of money to your kids and start them on a path to becoming a financially independent adult.

How to introduce your child to money

Your child’s first introduction to money should be tangible. Now isn’t the time to introduce concepts like how to use a credit card. And you can’t get more tangible than playing with money – especially coins. Coins can be picked up and held in their hand, placed in pockets, or slid into a piggy bank. If you think about it, your first introduction to money was probably through coins too. Maybe your parents gave you coins for your allowance, or you had a grandparent who placed a Toonie in your hand whenever you visited.

Explain a coin’s value

Introduce each Canadian coin to your child and tell them it’s value. Preferably you want to give them an actual coin to hold (and keep). Kids are likely to assume the larger the coin, the more it’s worth. Explain that although a 5 cent nickel is larger than a 10 cent dime, it’s actually worth less. Encourage them to examine each coin, front and back. Ask questions: What do they notice about it? Is there an animal or a picture on it? Are there edges rough or smooth? Counting coins is a great way to not only learn practical money handling skills, but also an opportunity for parents to sneak in a little math.

4 fun games to play for kids using coins

At this stage of your child’s financial education, you want to let them play! And fortunately, there’s plenty of fun and easy games and activities that parents can engage their kids in to learn not only the value, but also how to use money. For these activities, you don’t need a stack of actual coins. If they’re available, great. If not, you should be able to buy plastic Canadian coins online or at the dollar store. Alternatively, get crafty and print your own Canadian coins.

1. Skip Counting

Skip counting, that is being about to count by 5s, 10s, or 25s, is one of the first steps in being able to count money. To help your child practice, you can use skip counting songs. Jack Hartmann has some songs available on YouTube that are designed to teach skip counting.

2. Money sorting

This is a fun and easy game to play that not only only teaches practical money handling skills, but also an opportunity for parents to sneak in a little math. You can play along with your kids. Every person gets a pile of coins. Make it a mix of nickels, dimes, quarters, and dollars. Then count them out, adding up their value, and see who has the most money. While kids are still learning, start small and ensure the mounts of coins are just enough to add up to a dollar, then increase the pile as their abilities grow.

3. Play shop

Once your child understands the value of each coin, it’s time to build on their knowledge and put it into practice. Set up a mini-store and put them in charge of the check out (bonus points if they’ve got a plastic cash register to play with, but a plastic jar works just as well!). If you have more than one child, they can take turns shopping or being the shopkeeper. Use items in the cupboard, like tin cans, and price them ahead of time. Keep the amounts low so your child practices adding dimes, nickels, quarters or even dollars, and then is able to make change.

4. Play online‍

Peter Pig’s Money Counter is a free online game that helps kids aged 5 to 8 practice identifying and counting Canadian money. They’ll even learn a few facts about our currency to boot! Money Master is another free online game where you can choose your currency rate and level of difficulty, from easy to advanced, then click and drag coins and dollars across the screen to equal the value shown.

Explain to kids the concept of earning money

Many of us saw our own parents going out the door in the morning for work. And while the current pandemic means we’re more likely to move from the kitchen table to the home office for yet another Zoom meeting, kids should understand that the Bank of Mom and Dad doesn’t just happen. You work for money.

Parents can help kids understand the concept of earning money by giving them a weekly allowance. An allowance could also be tied to doing fun chores around the home. The bonus for kids is studies have shown that tackling tasks around the home helps build their competence and self-esteem. Mydoh can help make the process even more fun for kids aged six and up. The digital money management app lets parents set tasks and pay out an allowance each week. You know what they say? Give a man a fish, he’ll eat for a day. Teach a man to fish, he’ll eat for life.

Show kids that things cost money

We all know that before they can even walk, kids are little sponges, soaking up the world around them. Your child has already watched you going into the store, selecting an item off the shelf, then handing over a little plastic card, before leaving with it in hand. Now that they’re a bit older, help them make the connection between wanting a toy and paying for it. Explaining that things cost money doesn’t need to be complicated. Simply explain when they ask for a toy car or a pot of slime that it will cost $5. Rather than paying by plastic, let them practice spending their own money for the item. Let them physically hand over their money to the cashier and pocket the change.

Learning about financial literacy should be, well, child’s play. So, give your kids an opportunity to play with coins (while sneaking in a little learning) and some real world practice of earning money around the home.

Use Mydoh to teach kids about money in Canada

Mydoh is a money management app for kids that comes with a digital Smart Cash Card to give them some real-world experience with spending their own money. Parents can create weekly chores for their kids, and set up weekly allowances to their kids’ Mydoh Smart Cash Card. Find out how you can use Mydoh as a way to help your kids learn, earn, and save.

Download Mydoh today to learn more.

As parents, we’re often our child’s first role model. That’s also true when it comes to money. While feeling responsible for our childs’ “financial education,” may sound daunting, it doesn’t have to be! Here’s how you can talk to your kids about finances, as well as some practical tips to help them build a plan to earn and save their own money.

When should kids learn about saving money?

Research shows that kids’ money habits are formed by the age of seven-years-old—so the earlier you can teach them about saving money, the better!

One of the most challenging aspects of teaching financial literacy is we may not have gotten much in the way of education when we were young. Anyone who has heard “money doesn’t grow on trees,” will know what we’re talking about! Financial education, a.k.a. “the money talk,” can start earlier than you think. After all, young children are sponges. Even by watching you buy things at the store, your preschooler is figuring out the power of money. This is backed up by researchers at the University of Cambridge.

Read more about why kids and teens should start saving money early

How do I talk to my kids about saving money?

Kids are naturally (and relentlessly) curious. When they’re young, explain that in order to earn money, you need to work; that money is an exchange of energy. It doesn’t appear as if by magic. If you’re out shopping and they ask for their favourite toy, that’s a teachable moment to explain you don’t have the money to pay for it, but they could use the money in their piggy bank another time. Before you head to the supermarket, set a budget and involve them in sticking with it.

As your kids grow older, let them know they can come to you with questions, or involve them in money-making decisions that affect the whole family, like whether to book a cottage or take a road trip in the summer. If you’re negotiating a new job offer or researching which robo advisor to invest with, share the experience with them. Be open and honest about the realities of making and saving money. The bottom line when it comes to teaching our kids about money, is to start. Answer their questions truthfully. And if you don’t know, well, that’s a teachable moment for you both to look online or speak to a financial advisor and seek out the answer.

Read more about the parents guide to financial literacy for kids

7 tips for teaching kids to save money

Here are some strategies parents can use to help their kids earn, save, and even wisely spend their own money. If your kids learn to practice good money habits when they’re young, they’ll be firmly on the path to becoming financially responsible adults.

1. Learn the difference between want vs. need

One of the most essential skills your child can learn when it comes to saving money is understanding the difference between a want and a need. Why? Once they grasp a “need” is a new pair of sneakers for phys ed, but a “want” is a trendy pair of black Nike Huarache trainers, they can make decisions about how to spend their own money. Is the item something they need or simply want? And is it worth spending their cash on? Learning the difference will help empower your child to make decisions to save for what really matters.

2. Set a savings goal

Help your child set a savings goal. Maybe it’s a bluetooth karaoke system or cool Air Hog drone. Whatever it is, ideally, it should be a goal that excites them! It should also be a realistic savings goal. After all, a year is an awfully long time in a nine-year-old’s life. Make sure it’s just long enough that your child is willing to delay gratification in order to get what their little hearts desire. If they don’t know how much the item costs, research the cost, so they know exactly how much to save. Remember those fundraising charts that were shaped like a thermometer? Encourage your kids to draw their own and colour it in as their savings grow each week. That way they have a visual representation of what it is they’re saving for and how close they are to success.

Tip: Mydoh’s savings goal calculator for kids makes it easy to see how long it’ll take kids and teens to reach their goals!

3. Encourage kids to make their own money

In order for kids to learn how to manage their own money, they first need to have their own dough. On top of receiving money for birthdays or holidays, encourage your child to make their own. The most obvious way is through an allowance, which can be tied to daily or weekly chores. Even kids as young as three-years-old can benefit from helping. Chores not only help develop responsibility, but your child will feel like they’re contributing to the family. Encourage older kids to earn their own money outside the home, whether that’s making money online as a kid, a part-time job babysitting, or walking the neighbourhood dog.

Read more about how to encourage kids to start a business at a young age.

4. Give them opportunities to earn money

Tackling tasks at home is a great way for kids to earn extra income. These chores could be daily (like making their bed) or weekly (watering the plants). Mydoh makes doing chores easier. Parents can create daily and weekly tasks in the Mydoh app, which helps kids aged six and up to keep track of what needs to be done. Instead, Mydoh does the work of nagging for parents with reminders to complete tasks! Set a task, enter a completion date, and assign a dollar amount for that particular chore. As kids complete each task and mark it “done” they’ll bank some coin, which is automatically paid out on Pay Day. Mydoh comes with a Smart Cash Card, so kids can spend what they earn.

Read more about best chores for kids to earn money.

5. Have a place to save money

Earning money is one thing, and being able to spend it is another (and your kid would argue way more fun!). But, being able to save it is an important part of financial literacy too. After all, we’d argue there’s only so many Squishmallows one kid needs. Graduate your kids from their first piggy bank to their own savings account, like RBC Leo’s Young Savers account. Having a real bank account helps kids feel a sense of ownership over managing their own money. For older kids, guiding them through accessing their account online takes the mystery out of things like logging on to pay a bill or send an e-transfer. Look for a bank account with low or no monthly fees, no minimum balance, and easy access to the funds.

Read more about opening a bank account for your child.

6. Don’t punish mistakes

We all make mistakes when it comes to money. Your kids will be no different. They’ll spend on an item they’re convinced is a “need,” only to discover it’s a fleeting “want.” Or they’ll buy a new video game without seeing if it’s on sale elsewhere. Part of helping kids learn about money is allowing them to make mistakes. Instead of punishing them or lecturing, discuss their choices and ask your child what they’d do differently next time? What did they learn from their experience? Mydoh also makes it easier for parents to “put pause” on their kid’s spending with its “lock card” feature. On the flipside, it’s tempting for parents to swoop in and rescue our kids when they make a mistake. However, there’s also value in resisting our impulse to protect. Your child will learn money is a finite resource, once they’ve spent it, it’s gone. Better to learn that lesson now when they’re young, rather than 28! That way, they’re more likely to make wiser choices in the future.

Learn more: 10 money mistakes teens make and how to avoid them.

7. Set a good example

This is probably the hardest tip for parents to embrace. Setting a good example when it comes to money means practicing what you preach. And while we all wish we were Warren Buffett, it’s okay to fess up to your own money mistakes, or show your children that you’re always open to learning. Next time you go online to pay the bills, get your child involved. Teach your kid how to use a credit card responsibly (and explain to them why it’s important to do so!). Another way to set a good example is to give age appropriate examples of what you spend—and why. It could be explaining why you chose a generic brand of apple juice over the branded juice boxes, or why you made the decision to buy a second-hand car outright vs. leasing a brand new model (hint: cars depreciate in value!). What’s important is looking for ways to share your money-making decisions with your kids and demystify the world of finances.

Learn more: 10 common money mistakes parents make and how to avoid them.

The best way to teach kids to save money is giving them real-world experience

Mydoh is a money app that comes with a Smart Cash Card designed especially to give kids some real-world experience of making their own money, as well as saving it or spending it on what their heart desires. Parents can create weekly tasks for their kids to tick off and set up a weekly allowance to their kids’ Mydoh Smart Cash Card. Learn more about how Mydoh works.

Download Mydoh today to learn more.

‍Why is teaching kids good money habits important?

For some parents, that question is scarier than any inquiry about the birds and the bees. In a 2019 survey, 25 per cent of parents were either very or extremely reluctant to talk about financial topics with their kids, and another 25 per cent classified themselves as “somewhat reluctant.” 

We feel squeamish talking about money for a number of reasons. We don’t want our kids to worry about money, or we think they may tell the neighbours how much we make. We feel that we don’t know enough about money or personal finance to teach our kids about it, or we’re worried we’re not good role models when it comes to spending and saving — and that our kids will find out about, or, worse, emulate our less-than-ideal money habits.

But if we want our kids to develop good money habits, parents need to get comfortable with talking to them about things like spending, saving, debt, and investing. If we don’t talk about money, we’re sending the message to our kids that money is something mysterious, shameful, or even scary. And it’s hard to form good money habits with those beliefs.

Having honest conversations about money is even more important when you consider that Canadians today are carrying record amounts of debt. In fact, according to Credit Canada, the average Canadian household debt has increased four times in 30 years: we now owe $1.78 for every dollar earned. So, we owe it to our kids (pun intended) to help them develop smart money habits and set them up for a healthy financial future. 

Learn more: How Canadians teach their kids about money.

Teaching kids about good money habits starts at home 

We’re not suggesting that parents have to break out tax returns and pay stubs in order to talk about household finances. In fact, telling your five-year-old how much you earn could be counterproductive; most elementary school kids won’t get the difference between $1,000 and $100,000.

Instead, start with what’s most familiar to kids: their home. Take a little tour of the house and talk about what it costs to keep it running. You can show your kids the monthly bills for electricity, water, heat, property taxes, and home insurance, and they can tally up the amounts. Discuss rent or mortgage payments and let them know how much it costs — literally — to keep a roof over their heads. You can also talk about how much you spend on groceries, gas, and insurance for the car, as well as expenses like medications and clothing. Another important lesson is talking about saving for retirement or post-secondary education. 

These conversations are tangible ways to help kids learn the difference between wants and needs. When they know the real costs of living, it’s easier for kids to understand why you don’t order pizza every evening or why there’s no money in the budget to buy that $200 pair of sneakers. 

And when kids have a sense of just how much cash goes to running a household every month, then how much you earn begins to make more sense. Younger kids begin to understand that it costs a certain amount of money each month to live. For teens who are contemplating their first job or starting their career and entering the workforce, information on how much you earn and how much it costs to run a household can help them make informed choices and entrench good money habits early.

Tip: Mydoh’s savings budget calculator helps kids and teens see where their money is going and how much they can save.

Talk to your kids about good and bad money habits

One of the easiest ways to teach kids how to develop good money habits is to give them an allowance, and then use it as a teaching tool. 

With little kids, the classic “three jar” system works well: they can divide their weekly allowance into three containers marked “spend,” “save,” and “give.” This gets kids used to the idea that some of their cash is meant to be spent now, some saved for later, and some used to make the world a better place for others. Let your child pick the charity for their “give” jar — maybe an animal shelter if they adore dogs, or a charity to honour a loved one who’s been ill. They’ll be more excited about giving back if the cause is one they care about.

As kids get older, you can up their allowance, along with their financial responsibility. This could mean gradually making your kids responsible for more and more of their own financial decisions, like buying their own clothing beyond the basics, video games, or trips to the coffee shop. Once they’re old enough, encourage your teen to get a part-time summer job to pay for these extras and save for their future. 

What if your kid spends all their money on a coveted hoodie and has nothing left to go out with friends? Instead of bailing them out, gently point out they’ve learned a valuable lesson in budgeting. The Mydoh app lets both of you track kids’ spending, while empowering them to make choices about purchases without going into overdraft. In a pinch, the app’s Lock Card feature is a good way to pause their spending while you have a money talk with your kid.

Learn more about how Mydoh’s money app for parents and kids works.

Discuss your own money habits

What if you’re carrying a credit card balance? Maybe you haven’t yet taken advantage of your employer’s matching-funds offer for your RRSP (Registered Retirement Savings Plan). Or maybe you’ve done a little too much online retail therapy.

While your initial reaction might be to feel shame, these situations are opportunities to teach your kids powerful lessons about good and bad money habits. Better still, they’re a chance to model accountability and make changes in your own financial habits.

Read more: 10 common mistakes parents made and how to avoid them.

Speaking of accountability, consider showing your kids your credit card statement. Granted, you may have to take a deep breath first, especially if your credit card debt has gotten out of hand. You and your kids can then brainstorm ways to change your spending habits and pay off the balance. For example, have your kids help you identify the “wants” versus “needs” on the bill and make a plan to stick only to the needs. Find other sources of cash, like selling unused items on Kijiji or Facebook Marketplace, to help pay down the debt. You can explore other financial options with older kids— like using a line of credit that offers lower interest rates. Make a thermometer chart to track your progress and have a celebration when the debt is gone. 

Teaching kids good money habits with games

The strategies mentioned above for paying down credit cards are an example of “gamification” — using the same properties that make games so addictive and applying them to other areas of life. Like (cough) developing smarter money habits.

Games are a great way to teach kids about money and to motivate them to develop healthy money habits. Online, you can find lots of printable worksheets and money games that teach kids basic money concepts in fun ways. 

3 board games to teach kids better money habits:

• Little kids might love Lemonade Shake Up!, which introduces number recognition as well as the concepts of saving and working for money. 
• The Allowance Game teaches kids from first grade and up how to handle money and make change for larger bills. 
• Old standbys like Monopoly and Monopoly Junior teach currency recognition, addition and subtraction, as well as debt and the opportunity costs. When you buy Park Place, you may not have enough money for Boardwalk.

The importance of encouraging financial responsibility in children

Talking about money has tangible, immediate benefits. A 2015 survey by the Organization for Economic Cooperation and Development (OECD) found that a 15-year-old who talked about money with their parents scored higher on financial literacy.  

The lesson here is whatever you do, keep talking to your kids about finances. Being able to have honest conversations about our financial goals, beliefs, doubts, setbacks, and triumphs is one of the best ways to cultivate healthy behaviours and attitudes toward money.

Read more: 8 reasons why financial literacy is important.

Find out how Mydoh can help give your kids a real-world experience of earning and spending their own money today. Download Mydoh today to learn more.

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