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my money coach

Kids and money – part III

by Tim St Vincent

Last month we talked about kids and money, this month we will finish that conversation and talk about how to set up an account for a child and the different types of things you can teach your children about money by their age group.

How young can your child be when you set up an account for him or her? Well, pretty much as soon as they are born! All you need is a couple of pieces of ID such as a Birth Certificate and a Social Insurance Number to set up an account! Can you set up a joint account (dual signature) with your child so that you can have some control over their spending? Yes, but be aware of something called “Right of Offset.” Essentially this means if you owe money to a bank, in any form, and you get behind in your payments, they have the right to go into your accounts (so long as it’s with the same financial institution) and withdraw funds to cover the debt. This includes accounts that you hold jointly with someone else (i.e. your child). Also be aware that any funds deposited to the account of a minor, held either jointly or singly, through an ATM, is subject to a seven-day hold.

Great! Now you have an account set up for your minor child. What are you going to teach them about money, as they get older? How are you going to teach them how to save and to use money wisely? Here are some suggestions for you by different age groups.

Ages 2-4

Play “store” with them. Help them to identify different types of coins and paper money. When you go shopping make playing store real for them and let them hand over money (use real money, not credit cards or debit cards).

Ages 4-6

If you are going to provide an allowance (see Part I of this series for information on allowances), this might be a good time to do so, preferably around five years of age. Continue to work with them on identifying money and perhaps some basic math. If they have an allowance, help them to identify something they want to save for; something that would take 4-12 weeks to save for. This teaches them how to save and delayed gratification – that they can’t have everything right away. Saving is a good habit to teach. If you can teach them to save 10 per cent now, that’s a lesson they will carry with them through life.

Ages 6-8

Talk to them and around them openly about money. No taboo topics here! Time to go beyond the piggy bank at home and take them to the bank to open an account. Show them how ATM and bank cards work. No, money does not appear miraculously; Mom and Dad work hard, put money into the bank, then use their bank card to take their money back out., Take them shopping with you and show them how you buy things and comparison shop and how you decide which item to buy.

Ages 9 -12

Start talking to them about wants versus needs. You may need a new pair of runners, and want a Nike brand, but what can you afford? Start talking to them about credit cards, debit cards, how they work and the differences between them.

Ages 12 – 14

Start having them set longer-term goals, more expensive ones than in the past so that they now need to plan to save for longer periods. Talk to them about ways they can earn extra money.

Ages 14-16

This is a good time to start talking about the different ways to invest their savings beyond the basic savings or chequing account. As they get closer to 16 talk to them more about taxes, the stock market and mutual funds. If you aren’t comfortable talking about some of these items, set up an appointment with an account manager at your local financial institution. They should be happy to talk to your child about these items. If you haven’t talked to your child about education past grade 12, do it now, you are running out of time! If they are going to continue their education, they may think you are paying for it, you may be thinking they are paying for it. Everyone needs to be on the same page here!

Ages 16-18

They are getting to the age where they’re going to get their first credit card. Time to start talking to them about credit scores and how they work, about borrowing and interest. They need real world examples, not just the math. If you haven’t yet, this is a great time to get into some detailed conversations about budgeting. Show them your pay stub, budget, cash flow and savings plan.

Money can be a tricky and touchy topic. It is about more than counting coins, though that is a great place to start. It is never too early, or too late to start teaching your children about money in all its facets.

If you have any topics you would like me to discuss in future articles, or comments you would like to share, please contact me at

Tim J. St Vincent is a retired CFP and is a Certified Educator in Personal Finance with the Credit Counselling Society, a Non-Profit organization. If you wish to contact the Society for further information, assistance or to attend a webinar, please call 1-888-527-8999 or visit or

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