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Financial Literacy for Kids
When you make the decision to have kids, one of the greatest rewards is watching them learn new skills — from reciting the alphabet to riding a bike. Financial literacy is also something that can be taught from a young age. By teaching your kids about money when they’re young — and continuing to have money conversations as they grow older — you can help your kids become more financially confident adults.
Read on for financial lessons you can pass along to your kids.
“Let’s play a counting game.”
Start teaching your kids about money by making a game out of counting loose change into a piggy bank or jar. How many coins can they count in 10 seconds?
Recommended time:
Weekends when you can relax for a few minutes.
Why?
Preschoolers may be too young to understand the concept of money, but they’re learning to count, and have a basic knowledge of quantities. By doing simple exercises like this one, you can help lay a foundation of financial literacy for them later in life.
“Know what this is? It’s a quarter.”
Teach kids how to identify bills and coins by talking to them as they handle money. Once they’re comfortable with various denominations, make a game out of identifying coins and bills.
Recommended time:
Each time you get change at the checkout counter.
Why?
At this stage, children are interested in shapes and colours. Handling money can help them learn about it and make them familiar with the concept of change.
“How many dimes in a dollar?”
Demonstrate how the value of bills and coins relate to each other. For example, put a loonie on the table and put 10 dimes under it.
Recommended time:
Weekends when you can relax for a few minutes.
Why?
Knowing the value of each bill and coin is as important as being able to identify them. At this stage, children can understand basic concepts about value — which provides you with an opportunity to teach your kids about money.
“It’s savings day.”
Start teaching your kids about saving money by creating a special Savings Day. Instead of an allowance, give them some money that they put in a piggy bank for a future goal like a special toy.
Recommended time:
The first Saturday of every month.
Why?
At this age, children are developing a sense of time. Even though they don’t understand the idea of “next month," they can learn how putting money away now means there’s money for later on.
“Want to help plan our next shopping trip?”
Have your child help with grocery shopping by cutting out discount coupons or using a price comparison app together.
Recommended time:
When making a shopping list.
Why?
At this stage, kids are easily attracted to new products and packaging but might not yet understand what’s involved in paying for them. Using this exercise, you can help them gain a better understanding of smart buying habits.
“So what do you want to do with your birthday money?”
Discuss putting a set amount out of each allowance, birthday or "pay day" into a separate piggy bank for your child’s savings account.
Recommended time:
When your child gets money.
Why?
Either through allowance or money for extra chores, kids at this stage are often introduced to their first earnings. This is the ideal time to introduce the concept of “paying yourself first."
“It’s savings day.”
Start teaching your kids about money through the importance of saving by creating a special Savings Day. Instead of an allowance, give them some money that they put in a piggy bank for a future goal like a special toy.
Recommended time:
The first Saturday of every month.
Why?
At this age, children are developing a sense of time. Even though they don’t understand the idea of “next month,” they can learn how putting money away now means there’s money for later on.
“Want to help plan our next shopping trip?”
Have your child help with grocery shopping by cutting out discount coupons or using a price comparison app together.
Recommended Time:
When making a shopping list.
Why?
At this stage, kids are easily attracted to new products and packaging but might not yet understand what’s involved in paying for them. Using this exercise, you can help them gain a better understanding of smart buying habits.
“So what do you want to do with your birthday money?”
Discuss putting a set amount out of each allowance, birthday or "pay day" into a separate piggy bank for your child’s savings account.
Recommended Time:
When your child gets money.
Why?
Either through allowance or money for extra chores, kids at this stage are often introduced to their first earnings. This is the ideal time to introduce the concept of “paying yourself first.”
“How’d you like to have your own savings account?”
Take your kids with you to open their first bank account, and explain that the bank may pay them “interest” on the savings in their account.
Recommended time:
When you go to the bank.
Why?
Generally, seven- and eight-year-olds understand the concept of savings. This is a good time to talk about having both short-term and long-term savings goals — another important lesson in financial literacy for kids.
“Help me balance my chequing account.”
Teach your kids about money by letting them help with the basic adding and subtracting involved in checking their — or your — bank statement.
Recommended time:
When you get your bank statement.
Why?
At age 7 or 8, kids have usually grasped basic math skills, like addition and subtraction, which can help them learn the value of money.
“Help me balance my chequing account.”
For this lesson in financial literacy, let your kids help with the basic adding and subtracting involved in checking their — or your — bank statement.
Recommended time:
When you get your bank statement.
Why?
Between the ages of 9 and 12, kids have usually grasped basic math skills, like addition and subtraction, which can help them learn the value of money.
“Here’s how a chequing account works.”
Help your child learn to read a bank statement and better track spending habits through apps like TD MySpend. Talk about the differences between needs, like groceries, and nice-to-haves, like video games.
Recommended time:
When your child opens their first account.
Why?
At this stage, many kids are learning how to use their bank account by making deposits and withdrawals. It’s a great time to help them gain the confidence to manage their own money.
“Help me decide what we should buy.”
Make a guessing game about the cost of common household items. From electronics and appliances to food and household items, you can help teach your kids about money by providing real-world examples of things you need or want to buy.
Recommended time:
Before going shopping.
Why?
At this age, children are becoming junior consumers. It’s important to give them the right tools to make wise choices.
“Let’s start a tomorrow fund.”
Divide allowance into 3 jars or envelopes. A $10 allowance could be split up into $6 for spending, $2 for saving and $2 for sharing.
Recommended time:
When kids get weekly allowances.
Why?
Pre-teens are usually receiving an allowance or gift money that they need to manage. The amount doesn’t matter as much as how it’s handled. Taking the time to teach kids about money when they receive it is one way to help improve their financial literacy.
“Do you know what a debit card is?”
Explain what a debit card is, how ATMs work and the importance of protecting their PIN. Remind kids that the money they take out is coming from their bank account.
Recommended time:
Before you use the ATM machine.
Why?
Many pre-teens are starting to use debit cards (depending on the age restrictions of their bank), which offer hands-on money management experience.
“What do you want to do with your money in the future?”
Help teens make tangible goals and then discuss which accounts are the best way to help them reach these goals and build their financial confidence.
Recommended time:
When your teen gets gift money.
Why?
At this stage, teens are often developing their plans for the future. Take the opportunity to help your teens define their goals and develop a game-plan on how to achieve them.
“Do you know how a credit card works?”
Teaching your kids about money in this exercise involves showing your teen an example of a credit card statement so they can understand what must be paid (at least the minimum payment amount) and by when (the payment due date).
Recommended time:
When you get your monthly credit card bill.
Why?
It’s important for teens to develop an understanding of credit and how a credit card works. Having this knowledge at a young age can help them manage their finances with confidence when they get a credit card in the future.
“It takes how many hours of work to buy $100 jeans?”
Use digital banking tools like TD MySpend to help your teen track what they spend in a week. Whether they want to save for jeans, a movie night with friends or a new bicycle, help them create a budget and savings plan based on the results.
Recommended time:
When your teen starts making money beyond their allowance.
Why?
This exercise helps reinforce the connection between their part-time earnings and their purchasing power and can help them manage their spending.
“What do you want in your life in 10 years?"
Work with your teen and talk about savings goals, what they’re doing to get there and how long it will take to reach their goals.
Recommended time:
When considering post-secondary education.
Why?
At this stage, teens are often seriously planning for the future — looking forward to college, university or trade school.
“First, let’s see what we have.”
When you’re considering a large purchase, talk to your teen about the features you must have, like a warranty, compared to the extras you’d like to have.
Recommended time:
Before making a major purchase.
Why?
Sharing the family budget will help your teen learn about real-world costs and keep their expectations in line with your family’s financial reality. Being upfront about household costs can help them build financial knowledge that they can use in their everyday life.
“Want to make your money go further?”
Encourage your teens to comparison shop and to account for fees and taxes. Show them how they can use tools like TD MySpend to help give them a better sense of how much they spend on particular items.
Recommended time:
When doing online shopping.
Why?
Once teens start earning and spending their own money, they’ll likely want to learn how to get the best value for their hard-earned wages. Teaching your kids to compare prices helps them understand the value of a dollar — and can help them feel more confident about managing their money.
“Let’s chat about car costs.”
With your teen, pretend they’re thinking of buying their own car. Go online to compare insurance quotes. Discuss with your teen how they may budget for this expense, as well as car maintenance and gas costs, and be sure to discuss and plan for the unexpected expenses (accidents, theft, etc.) that can come with car ownership.
Recommended time:
When they’re studying for their learner’s permit.
Why?
At this stage, teens may not be aware of all of the costs associated with driving. Reinforce that driving comes with many financial factors to consider besides the cost of insurance and gas.
Helping your kids understand finances
No matter what their age, it’s never too late to start teaching your kids about money. Not only can financial literacy lessons help your kids learn about money management, it can also help them build the foundation for a financially secure future.