Start teaching your children financial skills early.

• Author: Bissonette, Laurie
• Position: Business Sense

Every business owner knows how important financial skills are to operating the business. And growing new entrepreneurs is good for the economy. So why then not try to help our children by teaching them financial skills as early as possible? A client of mine was recently commenting that he regularly encourages his children (in their teens) to ask questions about their money, their tax returns, and investments. So how do you teach your children about money and when is a good time to start?

Start now!

Children even as young as preschoolers can start learning about money One fun way to engage your children is playing "store" where they have to earn their own money and pay for goods. For example, if a book costs $5, you or your child could count out five paper bills or coins to exchange when purchasing the book at your store. Or even count out change, as they get older. I love it when I get a checkout person who knows to give me a Loonie when I pass them $10.25 for an order that comes to $9.25. You know they are used to making change. The person who gives you back your quarter and three more never had that training.

Young school age children can help you cut out coupons or practise counting by adding the dollar value of items in the grocery cart as you explain the related costs. This may also work when the child wants to buy that extra item; you can explain the budget for the groceries and how much extra that item would be.

This is also a good time to open a bank account and take them to the bank to make a deposit with their birthday money

You might have your child set a goal to purchase a special item--say, a toy. Make sure the ability to save for the toy is within reach of a few weeks of achieving so they can understand the concepts you are trying to teach them. Let them pay with their own money and when they want the next toy, help them save to purchase it on their own.

Children between the ages of nine and 12 can be given limits about how much of their allowance or birthday gifts they can spend versus save. One example might be to have your child spend 50 per cent, and save 50 per cent (or you could expand the less and save 30 per cent and donate 20 per cent) of their money. They can also save for a special purchase and you can help them by identifying...