Teaching financial literacy to your children clean copy for library

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  1. 1. What is the attitude of young adults towards money Steps parents can take toward educating their kids about money Financials lessons that can be taught by specific age ranges
  2. 2. The vast majority of Canadians (99 per cent) agree it is important to develop good financial habits early in life Study done BMO Financial Group-April 16, 2013
  3. 3. Ninety-six per cent of Canadians agree that teaching financial literacy will contribute to personal and household financial stability and help the Canadian economy Nearly half of Canadians (43 per cent) believe that children under nine years old should have a basic understanding of finances, while 79 per cent believe pre- teens should have a solid grounding on personal finance matters
  4. 4. Only 18 per cent of parents spend a lot of time discussing money and financial matters with their kids Comparatively, parents spend significantly more time talking to their children about school (62 per cent), their hobbies (50 per cent), their friends (47 per cent) and their future (37 per cent) than about financial matters
  5. 5. 61 per cent of parents agree that they wish they had been instilled with the importance of savings at a younger age. 94 per cent of parents agree that if Canadian youth are taught about savings at an early age it will lead to better financial management practices in the future The poll was carried out by Ispos Reid on behalf of a number of Canadian credit unions and interviewed 1,527 Canadian adults, including 431 parents, from coast to coast from March 19 to 26, 2014
  6. 6. Only 44 per cent of parents speak with their children about money, finances, budget and savings, with only 16 per cent involving their children in money management decisions. One in five (19 per cent) Canadians do none of these things. 67 per cent of parents state their child do not save any money each month.
  7. 7. Information from National Report Card onYouth Financial Literacy (NRCYFL) study by The British Columbia Securities Commission (BCSC) -October 2011
  8. 8. Majority agree it is important to learn about finances at an early age.
  9. 9. 90,735 $31,648 0 20,000 40,000 60,000 80,000 100,000 Expections Actual College Students Salary Expectations
  10. 10. Over half (51%)carry debt
  11. 11. LifeValues Quiz Smart about Money.org
  12. 12. Inner Values Social Values Physical Values Financial Values
  13. 13. Social LifeValues
  14. 14. 1. Start Young
  15. 15. 2.Teach through allowance
  16. 16. The Gift System The Reward System The Income System
  17. 17. 3. Get them thinking about budgets
  18. 18. 4. Help them understand the consequences of debt
  19. 19. 5.Talk about Investing
  20. 20. Goal You may have to wait to buy something you want. You need to make choices about how to spend money. Lesson learned Delay gratification Helps differentiate needs vs wants If you want it, you will need to save for it
  21. 21. It starts with 3 simple questions: Save:What is something that you will need to save for? Spend:What is something you want to spend your money on right now? Share:Who is someone you love and want to share your money with?
  22. 22. Review the list with the children. Now have them compare one item against the next and choose which one they want more
  23. 23. A Chair for My Mother by Vera B.Williams Miss Rumphius by Barbara Cooney A Money Adventure by Neale S. Godfrey Berenstain Bears, Trouble with Money by Stan & Jan Berentain How the Moonjar was Made by Eulalie Scandiuzzi Kristy and the Clever Cash Cow by Michael Schweizer
  24. 24. Goal Saving for short-term goals to long- term goals Lesson learned Recognize needs versus wants Helps differentiate needs vs want Introduce budgeting Introduce the power of compounding interest
  25. 25. End ofYear 1 $250 End ofYear 2 $256 End of Year 3 $262 Total Interest $768
  26. 26. Young Teens(Ages 13-15) Establish a clothing allowance Explain how credit works and why it costs more to charge items. Teach your teen how to read financial information Older Teens(16-18) understand the pros and cons of different payment options such as cash, debit cards and credit cards understand different kinds of basic investments (GICs, stocks, bonds and mutual funds) understand the concept of living within your means and Importance of saving for college
  27. 27. Goal Money management Lesson Learned You should use a credit card only if you can pay the balance off in full each month Emergency fund Start saving for the future
  28. 28. Practical Money skills Financial Consumer Agency of Canada Get Smarter about Money
  29. 29. Make Talking about money A part of your life
  30. 30. 3i Financial Investment Services Inc. 9040 Leslie Street, #221 Richmond Hill, ON L4B 3M4 mayawariyar@3ifinanical.com C: 647.383.8037
  31. 31. This presentation is for information purposes only; anyone wishing to act on the information presented should consult their advisor