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January 25, 2024
How extended family can support children’s financial education
By Renée Sylvestre-Williams
Financial education for children is a family affair—but not just for parents. Here’s how the aunts, uncles and grandparents can get involved.
Extended family are great for babysitting and entertaining the kids. But they can also share important financial lessons.
I have Netflix at my house. I don’t really enforce a bedtime. And I’m all for chocolate donuts for Sunday breakfast. For all of these reasons, my oldest niece loves to sleep over. So I try to be the best role model I can while she’s still young enough to think I’m cool. That goes for money, too.
Financial education for children is still largely a family affair. But society has come to recognize the value of teaching kids about money from a young age. Case in point: a number of provinces now offer financial literacy programs in schools.
Of course, parents play the most important role in their children’s financial education. But kids are sponges of information during their formative years. Which means that aunts, uncles, and grandparents can have a huge impact on their financial habits.
Where do I start?
When it comes to the kids in your life, you may have a different approach to money management than their parents. And that’s actually a good thing. It will help them see that, in real life, there’s no one-size-fits-all approach to managing your finances. So feel free to share your vision with them.
For example, I like to take my niece to the local bookstore when we hang out. I tell her she has $25 to spend. We wander the aisles doing the math together to figure out what she can buy, tax included.
What should I talk about?
Extended family can tackle financial topics from various angles, just like parents do. Here are 6 ways to start the conversation with your nieces, nephews and grandchildren:
1. What is money for and why do we need it?
2. What can money NOT buy?
3. How do people make money?
4. What’s the difference between a need and a want?
5. What can’t you afford now but would like to be able to buy in the future?
6. What is a loan? A debt? Taxes? Compound interest? Life insurance? An investment?
Of course, you’ll need to tailor your approach to the child you’re talking to. For example, I asked my niece what she would do if I gave her money. Her answer: “I don’t know… I could put it in my piggy bank?” My nephew thought for a moment and said, “Buy skis!”
It’s true, he’s only 5. We’ve got some work ahead of us... In the meantime, we’ll keep going to the bookstore.
The benefits of talking about money with your nieces and nephews
There’s no shortage of opportunities to talk about finances with your nieces, nephews and grandchildren. Someone’s holding a fundraiser? Turn a chance to give back into a learning opportunity. Help them see for themselves the power of money. Or how much good they can do for others by managing their own resources wisely.
Kids love putting money in a piggy bank. So why not open a savings account with them? They can deposit some of the gift money they receive. And together, you can watch their savings grow (Until there’s enough for a little reward.)
Another option is a registered savings account. You could also open a registered education savings plan (RESP) for your niece or nephew. At any age. Or if they already have a plan, you can contribute to it. Be sure to talk to their parents first. That way, you can maximize the government subsidy without exceeding the contribution limit.
This article is intended to provide general information only. Sun Life Canada does not provide legal, accounting, tax or other professional advice. Please seek the advice of a qualified professional, including a thorough review of your specific legal, accounting and tax situation.
