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How to Make Kids Money-Smart

How to Make Kids Money-Smart

This post is sponsored by CPA Canada

Originally published August 2019

Financial independence is critical for individuals throughout their lives. Here are some important ways you can get your kids to think smartly about money from a very early age.

Every parent wants their children to grow into happy and healthy adults with rich and fulfilling lives. Financial independence is an important part of that equation—and it starts with financial literacy at an early age. “If children learn great habits when they’re young, saving and budgeting will come naturally when they’re older and earning more money,” explains Doretta Thompson, director, Corporate Citizenship at CPA Canada.


As early as pre-school, children start to notice money and what it can buy. At this stage, parents can introduce basic concepts of value by tackling three key questions:

  1. What is money? Show your child various bills and coins, and explain what makes each one different.
  2. Where does it come from? Draw a connection between your work and money, explaining that you go to work to earn money to buy things for the family.
  3. What can money buy? Stick to tangible examples like food and toys—things that your child will value and understand.

Everyday activities—such as withdrawing money from an ATM, paying a restaurant bill or buying groceries—present opportunities to educate your child. “Taking advantage of those ‘teachable moments’ is critical,” says Thompson.


As children mature, their interests will change and parents can begin to introduce more sophisticated topics related to financial independence:

  1. Earning money: Earned allowances—and later, part-time jobs—will solidify the connection between work and pay, and help children understand the effort behind every dollar.
  2. Learning to budget: Involving your child in planning a party with a budget can help them understand wants and needs, and prioritize what’s important.
  3. Learning to save: By suggesting your child “save up” to buy a specific game or toy or concert ticket, you can introduce the concepts of delayed gratification and finite resources (i.e., you can’t always get what you want, when you want it). Later, the discussion can expand to include saving for less tangible things, like post-secondary education and future goals.

Ultimately, says CPA and financial consultant Robin Taub in her 2011 book, A Parent’s Guide to Raising Money-Smart Kids, “you want your kids to understand that making a lot of money does not guarantee financial security; financial security comes from making sound decisions with the money you make.”


CPA Canada’s financial literacy program helps Canadians of all ages get smart about their finances through surveys, publications, worksheets and CPA-led seminars in communities across the country.

If you have a child in Grades 4 through 11, CPA Canada’s free school workshop series introduces basic financial literacy concepts and skills using age-appropriate interactive activities and cases studies. Check out the online catalogue for a full listing.

The best way to raise financially literate kids, of course, is to be money-smart yourself—so make sure to check out CPA Canada’s book, A Parent’s Guide to Raising Money-Smart Kids. Another great resource for parents is “Are You a Good Financial Role Model?,” a 60-minute seminar on how to improve your financial management and set a good example for your kids.