Skip to main content Skip to chat

Teaching the ABCs of personal finance

July 7, 2022

Written by Nick Patch

ABCs of Personal Finance Hero Image

Key takeaways:

  • The learning can start at an early age. Some suggest giving a weekly allowance equal to the child's age.
  • As kids get older, try to bring out the fun in finance with games or a lemonade stand.
  • With adolescence could come a big boost in allowance – and a chance to build important budgeting skills.

The ABCs of Personal Finance

You can only learn – and earn – so much from a lemonade stand.

When it comes to financial literacy, many Canadians seem to have room for improvement. That's why more school boards across Canada have introduced new curricula aimed at helping students from elementary age through to high school graduate with a firmer grasp on money and personal finance.

But if parents are willing to invest the time, it's possible to instill principles of smart money management even before it comes up in the classroom. Young people of all ages can learn valuable lessons about money at home.

"We believe in demystifying money," said Matt Beauchamp, a Calgary father of two who blogs about his home life at Dashing Dad.

Beauchamp was raised in an environment where matters of money were almost "taboo." When it came to his parents' salaries, mortgages, budgets or how they kept the lights on, Beauchamp was in the dark.

So as Beauchamp and his wife, Jane, raised their kids – four-year-old daughter, Clara, and son Ryker, 2 – they were determined to lift the veil of monetary mystery and create an open dialogue on dollars.

"We consciously made that decision in the hopes that, as they get older, our kids will not only understand these concepts, but they won't be afraid to come to us to ask questions as well."

With that in mind, here are some of the methods you can use to help young people of all ages – whether they're in diapers or dorms – better understand how to manage money.

Illustration of mom with a girl sitting on a giant piggy bank.

This Little Piggy Learned to Save

Lesson: How to Spend, Save and Give

Age: 5 and Under

A 1-year-old is more likely to swallow a coin than to understand what they're supposed to do with it. But some believe that soon after your child is old enough to walk, it might be worth considering giving them some walking-around money.

Yes, some parents choose this age to consider introducing an allowance. A good rule of thumb is to give the same amount weekly as the child's age. Trevor Van Nest, a Certified Financial Planner and the owner of Niagara Region Money Coaches, recommends paying the allowance in quarters and giving kids separate piggy banks designated for "spend," "save" and "give," allowing them to begin making financial decisions – and mistakes – as early as possible.

"Kids don't learn through theory," he said. "For little kids, it's really important that you give them almost full reins on what they do with their 'spend' money. They're going to be making some pretty silly decisions, and that's really important. You want them to make mistakes now."

Indeed, Beauchamp gives his four-year-old daughter $4 a week, then uses that wee wage to convey lessons about how long it takes to buy the things she wants. For instance, the $10 inner tube she wanted to buy to bring to the lake near their new Calgary home? That's two and a half weeks of saving.

Meanwhile, the new car she had demanded – "pink, it had to be pink" – might take a little longer.

"We're trying to keep it simple," Beauchamp said. "As soon as we start getting a little more complex, she starts to zone out."

This is also a good age to explain to children why parents have to work. For Beauchamp, these conversations have been especially pertinent since he works from home.

"Seeing the relationship between what we do during a work day and what that can afford the family is important."

Funny Money

Lesson: Entrepreneurship 101

Age: 6 to 11

As kids get older and their responsibilities incrementally increase, it's worth trying to bring out the fun in finance.

For younger kids in this age group, that might mean playing with toy money or junior versions of board games like Monopoly or the Game of Life, says Cheryl, owner of the Regina-based activity and party-planning blog Moms & Munchkins.

Once kids are around eight years old, it might even be time to help them blend play and pay by finding fun ways to earn money – or maybe even creating little elementary-school entrepreneurs.

"My daughter had no interest in a lemonade stand, but she loved helping me bake," Cheryl said.

Together, they came up with ideas for a batch of mouth-watering sweets like cinnamon swirl pastries and pumpkin bread, calculated the costs of baking and packaging, and determined a fair price.

"She grabbed onto it with a little direction and help from me, and before we knew it, she had over $150 worth of orders from friends, family and neighbours."

Toronto dad Casey Palmer gave his two boys a similarly early introduction to the world of work.

Though Palmer doesn't believe in allowances, he gives his kids – aged 5 and nearly 8 – a fair portion of the revenue any time they're featured in one of his popular social media posts.

"We then have detailed conversations about the money and what it's going to be used for later – things like real estate or school," said Palmer, who writes about his family at caseypalmer.com.

"I want them to understand the correlation between effort, money, and future returns."

Palmer also recommends leveraging your child's interests for lessons about money. For instance, he used his son's passion for Pokémon to teach him about stocks.

"I said that if you're a big fan of Nintendo and Game Freak and the companies that make Pokémon and you think they will grow, you could put money in them now predicting that the value will increase."

"He started to see there were many layers to how money and the economy work."

Pass Go, Collect $200

Lesson: Playing with Real Money

Age: 12-17

With adolescence could come a big boost in allowance – and responsibility.

Van Nest advises transitioning from weekly pocket-money payments to a big monthly allowance – a maximum of $200 – covering food with friends, school clothes, cell phones, and more. That way, young people have to budget it over a longer period of time.

"What we're talking about here is building budgeting skills. You're creating a level of economic independence while they're still under your roof."

But don't blindside young people with these new responsibilities. Help them anticipate each new expenditure, and prepare them for the costs on the horizon – like post-secondary school, for instance.

One way to help ensure a smooth transition?

Start giving your children control of small budgets early. Take back-to-school shopping. Cheryl recommends telling your child the total amount you're willing to spend and letting them allocate it accordingly.

"I have been surprised that they get more money-aware and start paying attention to price, instead of just what might look cool."

You're on Your Own Now, Kid

Lesson: Economic Independence

Age: 18 to 24

This is the time when young people are expected to begin taking control of their lives, but in reality, this is when most are introduced to the stress of self-sufficiency. A recent study found "Canadians between the ages of 18 and 34 years are more likely to ask friends or family members for advice (59%) compared with other age groups"— which means parental advice might be especially important here.

But experts emphasize the importance of avoiding bailouts. It's such a crucial point that Van Nest even encourages parents to get in the habit of allowing their kids to own their money mistakes when they're at a very young age, in preparation for the grown-up gaffes sure to come.

"One of the best gifts we can give our kids is economic independence," he added. "It's actually not a gift to economically house kids."

Young people who are working but living at home can pay rent, while parents gradually shift over other expenses like cars, phones, and food. That's how Van Nest raised three children of his own, all of whom are now in their 20s and financially independent. Well, mostly independent.

"The only thing they sometimes still use is my Netflix account," he laughs. “I have to text sometimes to say: 'Get off. Mom and I want to watch a movie.'

"We'll consider that a success."

This article or video (the “Content”), as applicable, is provided for information purposes only. It is not to be relied upon as financial, tax or investment advice or guarantees about the future, nor should it be considered a recommendation to buy or sell. Information contained in this content, including information relating to interest rates, market conditions, tax rules, and other investment factors are subject to change without notice and Tangerine Bank is not responsible to update this information. References to any third party product or service, opinion or statement, or the use of any trade, firm or corporation name does not constitute endorsement, recommendation, or approval by Tangerine Bank of any of the products, services or opinions of the third party. All third party sources are believed to be accurate and reliable as of the date of publication and Tangerine Bank does not guarantee its accuracy or reliability. Readers should consult their own professional advisor for specific financial, investment and/or tax advice tailored to their needs to ensure that individual circumstances are considered properly and action is taken based on the latest available information.

Tangerine Investment Funds are managed by 1832 Asset Management L.P. Tangerine Investment Funds Limited is the principal distributor of Tangerine Investment Funds. Tangerine Investment Funds Limited and 1832 Asset Management L.P. are wholly owned subsidiaries of The Bank of Nova Scotia. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.

General Terms:

Applicants must apply for the Card and must consent to a credit check. Accounts must be in Good Standing in order to receive Money-Back Rewards.
See the Tangerine Money-Back Rewards Program Terms & Conditions for full details.

Balance Transfers are treated as Cash Advances and interest applies from the transaction date that appears on your monthly statement to the date you repay the balance in full. There is no interest-free grace period on Cash Advances or Balance Transfers.

Annual Interest Rates: The annual interest rate on Purchases is 20.95% and Cash Advances (including Balance Transfers) is 22.95%. Rates are subject to change. If you don't make 2 consecutive monthly Minimum Payments, or at any time thereafter, an interest rate of 25.95% will apply to your Account on Purchases and 27.95% on Cash Advances (including Balance Transfers).

Other Fees and Rates: These fees are charged on the day the transaction occurs (unless otherwise indicated): Cash Advance: $3.50 within Canada, $5 outside of Canada; Balance Transfer: 3% or minimum of $5 (unless reduced or waived) of the amount transferred when it is posted to your Account. Dishonoured Payment: $25; Rush Card: $25; Over-Limit: $25 (maximum one Over-Limit charge per monthly statement period); Past Statement Reprint: $5 per past statement. There is no charge for a reprint of your current monthly statement. Foreign Currency Conversion: When the converted transaction amount gets posted to your Account, we'll add a foreign currency conversion fee of 2.50% to the converted transaction amount.

See your Information Box in the application for full details or visit Tangerine.ca/CreditCardLegal. Rates and fees are subject to change.

Cash Advances (including Balance Transfers) do not earn Tangerine Money-Back Rewards. See the terms and conditions of the Tangerine Money-Back Rewards Program at Tangerine.ca/CreditCardLegal for full details on other items that do not earn Tangerine Money-Back Rewards.

Benefits include:

Rental Car Collision/ Loss Damage Insurance: Damage and theft protection for your car rental when you rent for up to 31 consecutive days and charge the full cost of your rental to your Card.

Mobile Device Insurance: Protection on new cell phones, smartphones or tablets when you charge the full cost to your Card, or when you purchase it through a plan and charge all of your wireless bill payments to your Card. Covers up to $1,000 if your mobile device is lost, stolen, accidentally damaged or experiences mechanical failure.

Purchase Assurance and Extended Warranty: For most new purchases made anywhere in the world using your Tangerine World Mastercard®, you may receive a lifetime maximum of up to $60,000 for the following insurance coverage:

• Purchase Assurance to automatically cover loss, theft or damage on most new insured items for 90 days from the date of purchase
• Extended Warranty which may double the period of repair services to a maximum of one year

Insurance coverage is underwritten by American Bankers Insurance Company of Florida (ABIC). ABIC, its subsidiaries, and affiliates carry on business in Canada under the name of Assurant®®Assurant is a registered trademark of Assurant, Inc. Coverage is subject to eligibility, limitations and exclusions. For details of the coverage, including definitions and benefits, refer to the Certificate of Insurance provided with the card.

See the Credit Card Cardholder Agreement for complete benefits and terms.

In addition to Tangerine’s credit approval criteria, new applicants for the Tangerine World Mastercard® Credit Card Account must meet one of the following minimum criteria: $50,000 gross annual income, $80,000 gross household income, or $250,000 in Tangerine Savings Accounts(s) and/or Investment Fund Accounts(s).

13Booking.com: Mastercard cardholders will receive up to 7% off when booking accommodations marked with the Mastercard label and prepaying for such accommodations using an eligible Canada-issued consumer or small business Mastercard credit card, excluding any such cards that are used through a mobile wallet solution (e.g. Apple Pay, Google Pay, etc.), at booking.com/mastercardCanada.

Offer Period: April 1, 2024 – September 30, 2025, subject to early termination. Mastercard reserves the right to modify or cancel this offer at any time without notice. Neither Mastercard nor any participating financial institution card issuer has any involvement in or responsibility for Booking.com products or services and are not responsible for any claims or damages arising from the use of the Booking.com products or services.

Eligibility: This offer is available to Canadian residents who are holders of consumer credit and small business Mastercard credit cards issued in Canada.

Exclusions: Reservations booked but not prepaid are excluded from the promotion. Must select “Pay now” on the checkout page to receive the offer.

14FlexiRoam: Valid from 10/01/2024 and can be redeemed once per calendar year. Eligible World Mastercard cardholders can redeem a FlexiRoam eSIM and a 1GB of global** data roaming, and Mastercard World Elite cardholders can redeem a FlexiRoam eSIM and a 3GB of global** data roaming plan at no additional cost by using your eligible Mastercard payment card (the "Program Benefit"). Eligible cardholders will need to register by creating a FlexiRoam account. To determine eligibility, enter your full 16-digit Mastercard card number when prompted in the FlexiRoam Mobile Application or on the FlexiRoam website. Upon verification of your eligibility, you must complete the full enrollment process to utilize the Program Benefit.

The FlexiRoam eSIM and the 1GB or 3x1GB global data roaming plans must be activated within the calendar year following enrollment and each will be valid for 5 days from the date of activation.

Benefit can only be redeemed once. For subsequent purchases, a 15% discount will be automatically applied.

Terms, conditions, pricing, special features, and service and support options subject to change or cancellation without notice. Mastercard reserves the right to modify or cancel this Program Benefit at any time without notice. In order to redeem the Program Benefit, you acknowledge that you are entering into an agreement with FlexiRoam. By agreeing to the terms thereof, you acknowledge and agree that neither Mastercard nor any participating financial institution card issuer has any involvement or responsibility for the provision of any FlexiRoam benefit, subscription, products or services and are not responsible for any claims or damages arising from their use thereof.

This Program Benefit is non-transferable and may be terminated for any breach of the FlexiRoam terms and conditions. The offer cannot be combined with any other FlexiRoam offer. Your use of the Program Benefit is subject to FlexiRoam’s terms and conditions and other applicable legal terms and conditions available at https://www.flexiroam.com/terms-and-conditions/. Additional eligibility restrictions, exclusions and terms apply. See full terms and conditions.

The following cards issued in Canada: World Mastercard and World Elite Mastercard, if eligible. Check here for eligibility: mastercard.flexiroam.com/canada.

Cardholders cannot data roam using FlexiRoam in North Korea, Ukraine, Western Sahara & Tanzania.

15 Fubo TV: Eligible Mastercard* cardholders who are new subscribers** of Fubo will receive a C$30 discount on Fubo Canada Sports quarterly plan when they pay with their Eligible Mastercard. Offer not available to Quebec-based cardholders. The offer is valid one time only. Each eligible World and World Elite cardholder will receive the C$30 discount on his or her first payment only (total first quarterly payment with discount applied will be equal to C$49.97*** + applicable taxes) and thereafter, the quarterly subscription will automatically renew at a cost of C$79.97*** per quarter + applicable taxes until cancellation. To access the offer and subscribe to a Fubo Sports Quarterly plan, you must register at https://fubo.tv/stream/ca/mastercard. The $30 discount on the Sports Quarterly plan will be deducted from the cost of the plan at the time of checkout. Additional taxes may be applied.

Additional terms and conditions apply. Your subscription is subject to Fubo’s Terms of Service and Privacy Policy available at: Fubo Terms of Service. Terms, conditions, subscription pricing, features, programming, and service and support options subject to change without notice. You can cancel your subscription through your Account Page at any time before renewal, visit Fubo TV website (My Account). In the event of cancellation, no credits or refunds will be provided for subscription fees already paid. Mastercard and Fubo reserve the rights to modify or end this offer at any time and for any reason, without notice.

Neither Mastercard or any participating financial institution card issuer has any involvement in or responsibility for the provision of any Fubo subscriptions, products, or services, and are not responsible for any arising claims or damages. 

*The following cards issued in Canada: World Mastercard, World Elite Mastercard, and Muse by Mastercard if eligible. Check here for eligibility: https://fubo.tv/stream/ca/mastercard. Offer not available to Quebec-based cardholders.

**A “new subscriber” eligible for the one-time C$30 discount is someone who has not registered for Fubo services previously as determined solely by Fubo. Subscribers who have a subscription to Fubo services would not be eligible to redeem this offer.

*** Price subject to change. Visit checkout page or My Account page for current subscription price.

16 Mastercard Travel Pass: Certain terms, conditions and exclusions apply. For full details, please visit: https://mastercardtravelpass.dragonpass.com/terms-and-conditions.