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Financial Literacy and Kids: Start Them Sooner

Aug. 16, 2012
3 mins
Mom snuggles her daughter on the couch in modern home

Everyone knows how important it is for parents to support what their children are learning in school. This means sitting with them to do homework and making sure they are keeping their grades up. But what about financial literacy? Who is responsible for teaching kids about money matters? Financial literacy includes things things like opening a bank account or understanding how a credit card works - skills each adult needs to master. Should these topics become part of the curriculum and if so, when is it appropriate to start teaching kids about finance?

Start Them Young

In my opinion, financial literacy should start at home and as early as possible. It can be as simple as taking your 4-year-old along when you grocery shop, and talk to them about smart shopping and budgeting.  You can also start kids on a modest allowance at this age. These small exercises help plant the seed of understanding money. Later, these lessons can be explored in more depth in a classroom setting.

Teaching Your Teen Financial Responsibility

One of the most important times to teach kids about finance is in high school. It's usually when most young people are forming their habits when it comes to money and might be the first time they are making their own money through a summer or part time job. Here are some of the courses I think should be part of the high school curriculum:

Savings 101

This course would teach kids the basics about savings, for example, the important of starting your savings early. The lessons will consist of various scenarios that illustrate the power of saving over the long term. This is also a good time to teach students about the power of compound interest and simple investing strategies.

Understanding Credit Cards

Here students could explore what a credit card is and how it’s used - and to drive home just how easy it is to rack up credit card debt, and the impact of a high interest rate. This course would be especially important for college bound students who are more likely to be bombarded with credit card applications in their first year.

The Basics of Income Tax

I admit, I did not understand what income tax was until I started working full time at 23-years-old. This should not be the case with the next generation. Tax is a reality that will stay with us our entire lives, and parents and teachers need to help young people understand why we pay it.

Loans, Mortgages and Line of Credit

This knowledge is something young people may not need to put to use until they are in their late 20s, but taking the time to understand what it means to borrow to buy a house will help many naive young home buyers make a more informed decision when the time comes.

What's Your Credit Rating?

This is one of the most important numbers in a person’s life, yet many young people have no idea what it is. This course would touch on how a credit rating works, how it can be affected and what anyone can do to improve it if its low.

Joining Forces On Financial Literacy

These courses, in my opinion, could easily be offered in high school as electives. If parents are already talking to their kids about money and savings this would add great value. Even for those whose parents never taught them about money, this would help them be more financially savvy and set them up for later in life.

Financial literacy is a tandem effort between parent and teacher. For example, if parents take the time to teach their young ones what a bank is and how it important it is to save, then a course at school will make much more sense. That’s because it will already be part of their everyday life - financial knowledge won't be something new.

Rubina Ahmed-Haq

Rubina Ahmed-Haq is a financial journalist and personal finance expert with more than 15 years of experience. Her career spans three continents with appearances on TV, radio, print and online. She is the Finance Editor for HOMES Publishing. You can also read her columns in CondoLife and Active Life. Rubina runs the website She has also contributed on personal finance matters at The Toronto Star, The Globe and Mail, National Post, CTV Newschannel, Mississauga Life Magazine,, OurKidsMedia, CAA Magazine, South Asian Focus TV, ANOKHI Magazine, Bridal Fantasy Magazine, Canadian Running Magazine, FRESH JUICE magazine and NEWSTALK 1010.

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