Ontario’s new finance minister Stephen Lecce unveiled an updated career studies curriculum for Grade 10 students this week. Come September, financial literacy and planning how to fund the first year after high school will be included in the course. A welcome move given the rising debt rates and Ford’s OSAP cuts.
A friend shared how he worked three jobs to pay for the second year of his undergrad degree. Grades suffered as a result of it and he quit the program. Twenty years later he is working towards completing his education. His current income doesn’t qualify him for tuition assistance, but he has a family to support. So, it will take him a few more years to achieve his dream while putting his money management skills to the test.
Financial literacy is an integral part of Grade 4 to 12 education according to the Ontario Ministry of Education website which also offers a guide to parents to help support school learning. I recall my eldest referring to a budgeting assignment when he was doing the career studies course more than six years ago. But the younger one didn’t mention it when it was his turn four years later. Perhaps it was still there, just no reason to talk about it. However, with current consumer spending trends pointing to a complete lack of fiscal responsibility, one hopes the updated course takes a deeper look at money management as the minister suggested. My boys never learned any fiscal responsibility from school or our constant lectures till irresponsible decisions came back to bite them really hard!
Cultivating good money management skills at a young age is essential to financial health in one’s later years. Yet studies show that few parents discuss this with their children, either out of ignorance or laziness. Giving an allowance without explaining the importance of budgeting is a futile exercise. Most kids will spend rather than save it. One of mine went so far as to request an advance on the following month’s allowance — preferring instant gratification to saving up of course. The introduction to banking in grade two made a huge difference. We were advised to give him a weekly allowance of $8 (his age), of which he banked 3 weeks and spent the fourth.
Research indicates that 8 to 14 are critical years in the development of financial habits. Educators ought to consider a deeper focus on money management during these years.
Financial experts say helping kids differentiate between needs and wants is critical. As is teaching them to compare the cost of options. This can be difficult considering that most of their desires include wants and not needs. From my experience all the explanation in the world will rarely prevent them from making silly purchases unless they are penalized for it. And by that, I mean controlling their spending or taking money away from them. It’s a difficult line to walk.
I have learned that tough love is the solution. I used to think that parents who didn’t fund their children’s post-secondary education even though they could afford it were mean till I saw their kids step up to the challenge. It is a valuable life lesson.
Parents should also encourage children to earn their allowance or some extra money through doing small jobs, teach them how to save and be wise customers. Involving them in family financial planning decisions about major purchases, vacations, etc. teaches them to make informed choices.
Most important… since children learn through example, we must examine and correct our own attitudes towards money!