Sun Life Financial

How to Coach Your Child for Financial Success


The earlier we can teach our children the value of money and how to manage it, the better off they’ll be.  Here are some money managing techniques you can start teaching your kids today, no matter their age:

The early years (ages 5 to 11)
These are the early stages of money management and involve explaining simple and basic concepts:

  • Why do we need money?
  • How do we earn money?
  • What are the basics of saving and spending?

Introduce their first allowance and let them buy their own treats. Help them understand short-term spending (gum and candy) and long-term savings (bigger toys).

Pre-teen to early teen (ages 12 to 16)

As they get older, explain more complicated financial scenarios, like budgets and credit cards. Sit down with your child and help them write a small budget.

  • Introduce the concept of a budget.
  • Give them more freedom with their money. Allow them to make small mistakes, like overspending, so that they can learn from these lessons.
  • Discuss at the end of each month what was learned.

Have them prioritize what they want, and how they plan to get it.

Late-teen to young adult (16+ years old)

By now your child understands the basic concepts of money; how it’s used, the importance of spending wisely, and the difference between short and long-term saving. They also understand the basics of credit cards; you end up paying more with interest than you would by saving your money and paying with cash.
Having a real credit card might be appropriate. Start with a small limit, pay off the balance each month, and monitor their spending. If you do have to bail them out, do it in writing and make sure they understand they must pay you back.
They can also start contributing towards cell phone bills, clothing, entertainment and transportation expenses. Saving for college or university can also become part of their “plan.” And if you already have a plan to pay for your child’s post-secondary education, give them their savings back as a surprise, and get them off on the right foot.

March to the end zone!

Have financial conversations with your children early. The quicker they understand how to live within their means, the better. And hopefully the lessons will stick with them for life.
Get your finances ready for education savings or retirement, and contact your Sun Life Financial advisor today.
Don’t have an advisor? As a member of the CFLPA, you can find one through the CFLPA-Sun Life Financial partnership.

© Sun Life Assurance Company of Canada 2013.