In a June 2008 article, financial columnist Gordon Powers wrote, “Too many people don’t really understand how to manage money, which may be why they have so little of it to work with”. In his article, he quotes Finance Minister, Jim Flaherty who said “many Canadians struggle with unmanageable debt, fail to save adequately for emergencies, college or retirement, and generally make countless other poor financial choices that eventually leave them worse off. The root cause? Financial illiteracy”.
On January 27, 2009 Minister Flaherty tabled “Budget 2009: Canada’s Economic Action Plan”. In his speech he announced new measures “to raise the level of financial literacy” of Canadians by “establishing an independent task force… on a cohesive national strategy on financial literacy”.
At Moonjar, we believe that teaching financial literacy needs to begin at a young age. Since 2001, Eulalie Scandiuzzi, the creator of Moonjar, has been providing fun products that focus on financial life skills and the art of communication for independent young minds.
The Moonjar Moneybox, a teaching bank divided into three individual compartments for Saving, Spending and Sharing. It is a tool parents can use to teach positive money habits to their children and that helps create opportunities for conversations about money.
Brent Dobson from Moonjar Canada says “teaching children about money can be challenging for parents. The Moonjar Moneybox is a tool that helps open the money conversation and provides valuable financial skills. Children will visualize what their money can be used for. Moonjars offer an opportunity for kids to manage their money by teaching them how to
use it – through the concepts of Save, Spend and Share. They provide parents with a fun, financial literacy tool for their family.”
Moonjar offers these tips to parents for starting the conversation about money:
• Talk with your young children about money concepts. Most children, beginning at age 4 or 5, are visual learners, so using hands-on tools like cheque registers and moneyboxes can better help them learn concepts such as allocating funds and what interest means.
• Set goals and prioritize. Use pictures to help them visualize their goals and then prioritize what they are saving for, what the want to spend their money on, and with whom or with what they want to share their money. Set short and long term goals then discuss where the balance should be spent and shared on an ongoing basis.
• Discuss the difference between wants and needs. Working with them to set goals will help in overcoming the desire for “instant gratification”.
• But… let them make a few mistakes. Children, like adults, learn from their mistakes. From time to time, allow your child to buy a toy you believe will not be enjoyed very long, for example. Sure, they may be disappointed in a few weeks, but many lessons can be learned from this experience. Encourage them, without guilt, to plan their future purchases, weigh the cost and the benefit of their choices and to think twice next time, even sleep on it.
• Encourage young giving and youth philanthropy. Help your children understand that they are part of a larger world community through discussions about sharing their money and/or donating time to causes of their choosing.
• Be a good role model. Make sure your children see you doing the things that you are teaching them. Let them in on your bill paying, savings and investment plans and charitable giving. Discuss your attitudes and philosophies about money and tell them your dreams for how your money can fuel your passions.
Above all, keep the conversation about money open and honest and help teach your kids valuable money lessons.
Aritlcle by Bent Dobson of Moonjar Canada.
