According to a new study from BMO Financial Group, 96% of Canadians believe teaching children about money matters is essential to developing a healthier economy. However, even though most parents acknowledge the importance of talking to their kids about money, 82 per cent admit they don’t actually spend a lot of time doing it.

Instead, they spend most of their time talking to their children about school (62%), hobbies (50%), and their friends (47%). That’s a bit lame.

Try to get started early

Long before they can add and subtract, children are aware of money. They see you put coins into parking meters and take bills from the ATM, and the plastic that disappears into that red movie kiosk doesn’t go unnoticed either. If parents are attuned to their children's curiosity about money, they'll know when the moment is right to discuss it, writes Eileen and Jon Gallo, authors of The Financially Intelligent Parent: 8 Steps to Raising Successful, Generous, Responsible Children.

Parents avoid talking about financial topics that make them uncomfortable or that seem too complicated. Although you may model good money habits in certain ways, unless you complement these with equally good sound conversations, you’re likely to miss out.

View money as a tool

If these opportunities don't come naturally, or the timing isn't right, make it a point to plan on having a conversation — actually likely more than one — about money with your children. It's the only way they’ll learn to see money as a tool — in other words, something you have, not something you are, they explain.

But before you can talk to kids about having a healthy attitude toward money and what it means to earn it, you have to decide on your own values.

Some parents don't want their children to know about family finances because they don't want money to be used as a scorecard, while other parents don't want it to affect how their children treat people. But it’s still something you have to talk about.

Send a consistent message

Because you send your children messages about money all the time, it’s imperative that both you and your partner are on the same page when it comes to your money stories —and if you’re a single parent, well, that’s a story in itself.

A money story is an open, honest and personal outline of your relationship with financial issues, especially as you grew up because most people's relationship with money developed during childhood. You need to identify why you feel the way you do about money so you can send coherent and consistent messages to your kids.

When both parents focus on their money stories, children receive positive messages.

Encourage financial reflection

Getting your money stories straight doesn’t just mean that you agree on basic issues such as allowances, clothing or college savings.

It also means that both of you have agreed to identify certain basic money values you want to teach your children, such as giving is good or that you don't always get everything you want.

As with most decisions kids make, they’re frequently impulsive when it comes to money decisions. You want to teach your children how to think in terms of choices, alternatives and consequences, the authors suggest.

If you’re looking for some help with that, have a look at EconKids, a Rutgers University sponsored site that provides parents with ideas for using children's literature to introduce money matters to younger children.

Gordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a consulting firm focusing on retirement readiness. Gordon was a columnist for the Globe & Mail and Morningstar for many years and is also currently a columnist for Investment Executive, Canada’s national newspaper for financial advisors.

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