Aidan D’Souza says his mother has helped him ensure he makes wise money decisions for as long as he can remember.
At about the age of 10, D’Souza said his mother had advised him not to spend all his money on candy and frivolous gimmicks.
When he started working part-time jobs, D’Souza’s mother recommended that he save some of his hard-earned money for his long-term goals and an emergency fund.
Today the 23-year-old said his mother still guides him financially. She helped him set up mutual funds and taught him about compound interest, which accelerates the growth of one’s savings and investments over time.
“My mom has always helped me make sure my money goes to the right places,” said D’Souza, who lives in Toronto.
“She always wanted to make sure I was set for life.”
While D’Souza credits his mother for the financially secure position he is in, he acknowledged that not all Canadians have parents who are financially savvy or know how best to guide their children to make wise financial decisions meet.
In any case, experts say that it is never too late to learn financial literacy. And on the other hand, they say it’s never too early to start teaching your kids financial literacy.
“Just don’t be afraid of (money). I think people are often afraid of it,” said Anna Smith, director of marketing at CapIntel, a business-to-business financial technology company.
“Financial illiteracy is when people don’t talk about it and don’t learn about it.”
Growing up, Smith said her parents didn’t teach her much about money, which caused her to feel uncomfortable and insecure when she started managing her own. As a young adult, she said she got multiple credit cards, maxed them out, and got into “really bad debt.”
It wasn’t until she began researching how to get out of debt that Smith said she really learned the importance of financial literacy.
“I was so scared of it and going straight into it,” she said.
Now, Smith said she does her best to instill financial literacy and confidence in her daughter from a young age to prepare her for financial success, which she strongly advises other parents to do as well.
She found that telling your children about your financial failures is just as important as telling them about your financial successes.
“Money isn’t really talked about in terms of how to increase money, savings, investments and interest, and so I think it’s very important for parents to teach their children to be safe (for them) with finances said Smith.
Smith takes her two-year-old daughter shopping with cash to show her how much they’re physically spending on a single shopping spree. This can be a good first step in introducing children to money and purchasing power.
Smith also opened a savings account for her daughter and takes her to the bank to deposit money whenever she receives monetary gifts to introduce her little one to the world of banking, she added.
“Especially between the ages of one and four they say you shape a kid and they look at what you do and they emulate that for the rest of their life and so I think it’s just super important to show them whether or not they understand the concept,” Smith said.
Books are another way Smith recommends people introduce their children — or themselves — to personal finance. For example, she has a copy of The Richest Man in Babylon by George S. Clason that she plans to give to her daughter once she is able to read and understand the concepts.
At BlueShore Financial, financial advisor Nico Wong said they offer a program for young children where they give them a piggy bank with three sections – one to spend, one to save and one to share, the latter being for money they donate to charity Purposes can donate causes.
The concept is one that Wong suggests parents adopt at home by purchasing a piggy bank or jar from their local dollar store to create a similar system for their children when it comes to saving, spending and sharing, so they can learn the basics of money management.
As for adults who have been taught little to no financial education, Wong said they would benefit greatly from speaking to financial advisors or bankers, stressing that “anytime is a great time” to seek financial advice.
If they have children, they can take the same advice and knowledge home and share it with them.
The internet also offers a wide range of resources such as instructional videos and articles, but Wong said people should make sure the information they consume online comes from a reliable source or from someone certified to provide financial advice.
“Nowadays when there is so much information, so many different sources and things, I would personally stick to trusted sources – ever larger institutions, professional advice and so on,” he said.
“I always say avoid the things that are too good to be true.”
No matter your age, Wong said financial education will lead you to success.
“It’s never too early, never too late.”
This report from The Canadian Press was first published on May 9, 2023.
Noushin Ziafati, The Canadian Press
