How to Teach Your Children About Personal Finance

Caitlin
Author:
Caitlin
Caitlin Wood, BA
Editor-in-Chief at Loans Canada
Caitlin Wood has more than a decade of experience helping Canadian consumers learn how to take control of their finances. Expertise:
  • Personal finance
  • Consumer borrowing
  • Credit improvement
  • Debt management
📅
Updated On: November 11, 2024
Get a free, no obligation personal loan quote with rates as low as 9.99%
Free quote with no impact to your credit

Let’s look at personal finance as a skill and just like any other skill you might want to possess, you need to learn it. Money management might come naturally to some, but for most people, learning to handle their personal finances will take time and guidance. This is especially true for children, teenagers, and young adults. The twenty and under demographic probably won’t learn early money management skills through studying the newspaper or reading the newest personal finance blogs and books. Instead, they can learn about money through the adults in their lives, mainly their parents.

If you want your children to grow up understanding the value of a dollar, what it means to put in the work needed to earn an income, and then how to manage that income responsibly, it’s up to you and the example you set.

Teach Them Through Example

Children, especially young children, learn through the examples their parents set, so if you want your children to be good with money, you might want to start managing your money responsibly (if you aren’t already doing so).

Think about how you treat the income you make from your job in front of your children. Do your children only ever see you spending it? Are you children aware of any debt you might have? Do you pay for everything with a credit card? Do you children know about any of the responsible decisions you make about money on a daily, monthly, or yearly basis?

If your children grow up witnessing you make responsible and sometimes difficult financial decision on a regular basis, it’s likely that they will develop better financial habits and learn to manage their money more responsibly.

Include Your Children in Financial Decisions

If you want your children to understand the responsibility that comes with having money, you should include them in certain financial decisions. Obviously, this will depend on your life and how old your children are. The main goal here is to show your children that spending money isn’t something that should be done without any thought, but that spending money means making a decision.

Even if you don’t want to include them in the decisions making process, you could instead explain to them why you make certain financial decisions. For example, if you (or you and your spouse) have decided that eating out in restaurants is something you’ll avoid as much as possible so you can afford to go on a family vacation, you should explain this to your children. It will help them to understand what it means to save and spend based on financial goals (click here to read our essential guide for saving).

Set Family Financial Goals

Speaking of financial goals, try setting a goal that the whole family can contribute it, it’s a great way to show children how saving can allow them to achieve their financial goals, whatever those goals may be.

The financial goal could be as big or as small as you want, it’s up to you and your family. Just remember to include them in every step of the process. If your goal is to go a big family vacation next year, tell your children how much it costs and then how long it will take you to save for it. Provide them with examples of how the whole family can help save, for example enjoying the toys and things you already own instead of wanting something new or maybe having a garage sale in the summer to sell the items no longer being used. If your children are old enough to have their own jobs you could suggest that they contribute a small percentage of each of their paycheques toward paying for the trip.

Setting goals is not only an easy and effective way to teach your children a lesson about money and saving and it’s a great way to achieve something that might have just been pushed to the back burner otherwise.

Show Them What it Means to Earn

Earning money is not always easy, it takes time and commitment and responsibility to earn the money needed for your children to have the life they have, show them this. If they want new shoes or a new video game, something that’s not necessary, make them work for it. Ask them to do the dishes, the laundry, walk the dog, shovel the snow, or vacuum whatever needs to be done around the house. When they finish doing the dishes for a month straight they’ll hopefully appreciate what they have a bit more.

Should you charge your adult children rent if they still live at home? Read here.

Allow Them to Manage Their Money

Once you children get a job and start making an income, let them manage it. Obviously, you can and probably should guide them and advise them, but learning firsthand how easy it is to spend and how hard it is to save is something everyone needs to learn on their own because they probably won’t believe it until they see it.

If your children are less than enthusiastic about learning how to manage their money, just remember that they’ll thank you when they’re older.

Caitlin Wood, BA avatar on Loans Canada
Caitlin Wood, BA

Caitlin Wood is the Editor-in-Chief at Loans Canada and specializes in personal finance. She is a graduate of Dawson College and Concordia University and has been working in the personal finance industry for over ten years. Caitlin has covered various subjects such as debt, credit, and loans. Her work has been published on Zoocasa, GoDaddy, and deBanked. She believes that education and knowledge are the two most important factors in the creation of healthy financial habits. She also believes that openly discussing money and credit, and the responsibilities that come with them can lead to better decisions and a greater sense of financial security.

More From This Author

Special Offers

More From Our Experts

https://loanscanada.ca/wp-content/uploads/2023/10/Credit-cards-to-build-credit.png
Best Credit Cards To Build Credit 2025

By Lisa Rennie
Updated on July 17, 2025

The top credit building credit cards available to Canadian consumers looking to improve their credit score.

https://loanscanada.ca/wp-content/uploads/2017/12/fixed-rate-vs-variable-rate.png
Fixed-Rate vs. Variable-Rate Loans

By Lisa Rennie
Updated on July 17, 2025

Do you know the difference between fixed rate vs. variable rate? Read this article to find out how your interest rate affects your loan.

https://loanscanada.ca/wp-content/uploads/2017/11/short-term-loan.png
Where To Get Loans In An Emergency With Low Income?

By Lisa Rennie
Updated on July 15, 2025

Short term emergency loans are fast way Canadians can cover the cost of an unexpected expense. Use them for unexpected repairs and bills

https://loanscanada.ca/wp-content/uploads/2016/09/online-loans.png
Short Term Loans With Instant Approval

By Bryan Daly
Updated on July 15, 2025

Short term online loans are a great option for any and all borrowers, especially credit-constrained Canadian borrowers.

https://loanscanada.ca/wp-content/uploads/2021/09/Best-Prepaid-Credit-Cards-Canada.png
Best Prepaid Credit Card In Canada 2025

By Lisa Rennie
Updated on July 15, 2025

Find the best prepaid credit card in Canada for you. Learn about its fees, minimum balance and other features.

https://loanscanada.ca/wp-content/uploads/2021/09/How-and-Why-You-Should-Start-an-Emergency-Fund-1.png
How To Build An Emergency Fund

By Lisa Rennie
Updated on July 14, 2025

Learn some of the reasons why starting an emergency fund is key to your long-term financial success in Canada.

https://loanscanada.ca/wp-content/uploads/2024/02/budgeting-app.png
Best Budgeting Apps In Canada 2025

By Trevor O'Hagan
Updated on July 14, 2025

Check out the top budgeting apps currently available to Canadians and learn how to budget, set goals, and save your money.

https://loanscanada.ca/wp-content/uploads/2020/01/Transfer-Money-From-Credit-Card-to-Bank-Account.png
How To Transfer Money From A Credit Card To A Bank Account?

By Lisa Rennie
Updated on July 11, 2025

Interested in transferring money from your credit card to your bank account? We have all the information you need to make the transfer.

Recognized As One Of Canada's Top Growing Companies

Why choose Loans Canada?

Apply Once &
Get Multiple Offers
Save Time
And Money
Get Your Free
Credit Score
Free
Service
Expert Tips
And Advice
Exclusive
Offers