• MMT App
  • Careers
  • Contact
  • French
  • Find an Expert
  • Home
  • Mortgage Prep
  • Buying a Home
  • Renewal
  • Commercial
  • Rates & Lenders
  • More Value
  • Economic Insights
  • Our House Blog
  • MMT App
  • Careers
  • Contact
  • French
  • Find an Expert
  • All
  • Lifestyle
  • Mortgage Tips
  • Enriched Tips
  • Products
  • Real Estate

Published by DLC Marketing Team

August 23, 2023

What do Your Teenagers Need to Know about Money?.

As adults, we all know the critical importance of managing money wisely and the impact our financial situation has on our overall well-being. As parents we do our best, but there are plenty of life lessons we need to teach our kids, and personal finance doesn’t always top the list. We may also not be the best person for the job since around 50% of adult Canadians live paycheque-to-paycheque! So how do we choose which financial lessons, habits, and tactics to teach our children, especially if our own money management skills may be lacking?

Wants vs needs & cost vs value

Tweens and teens need to differentiate between needs and wants and how to prioritize what they spend their money on. Value and cost are two more important concepts they need to understand. A top-of-the-line iPhone or a carbon fiber mountain bike will really impress their teenage friends, but a cheaper version may perform very similarly and provide a lot more value, especially given the limited amount of funds they have. Kids are bombarded by marketing messages, and they need to learn how to avoid hype and be objective, so they can make smart financial decisions. There is a reason plenty of rich folks (even billionaires like Warren Buffett) drive basic cars – it’s all they really need.   If your teen or tween wants the latest and greatest must-have item, challenge them to explain the value beyond being new, trendy, or fashionable. When they want to buy something, encourage them to research the product, read reviews, and compare prices to make informed decisions.

Introduce basic investing concepts

Introduce your teens to basic investing and the concept of how to make money with money. Explain how investments can grow over time and the power of compound interest. Should you buy a stock (or an ETF, GIC, mutual fund or some other financial product) for a 14-year-old… absolutely!  There are lots of kids out there with parents who invested the time to explain shareholding and how it works at a level they can understand.

Kids are very familiar with many publicly traded companies like Disney, Roblox, Mattel and McDonalds. Holding a few shares (in an informal trust account or simply in your name) may not return enough to put them through college, but it will teach them the basics of investing, risk, and return for managing their finances in the future. It’s true that a savings mindset develops early and pays back over the course of a lifetime, but developing an investing mindset pays back HUGE over the course of a lifetime and will set your kids up for long-term financial security and wealth building. As soon as your kids turn 18, have them open a tax-free savings account (TFSA) and invest the funds, even if they can only muster $50 or $100 monthly to contribute.

Teach the bad (and good) about credit and debt

Credit is very easy to access these days and even first-year post-secondary students are often able to get a credit card. Responsible use of this first credit card can help establish a credit score and they are very convenient — almost a necessity for some online transactions. On the other hand, easy access to credit cards (with generous spending limits and 20% interest!) and a few spontaneous/poorly thought-out spending decisions can derail a future before it even gets started.

Failing to understand the impact and obligations of a student loan can also lead to a nasty surprise when it comes time to repay that money or get a car loan or mortgage down the road. Although federally issued Canada Student Loans are now interest-free, provincial loans may still carry interest. Either way, your kids need to realize that a student loan isn’t free money and that paying it back will definitely crimp their post-graduation lifestyle.

Remember that financial education is an ongoing process. Encourage openness about money and create an environment where your children feel comfortable discussing money matters with you. Starting to instill good money habits from an early age and being a supportive resource as they develop their financial skills will help your money-savvy kids grow into financially responsible, money-savvy adults.


Share this:
Categories: Enriched Tips Categories:

Recommended articles.

View More

Avoiding a Fall Financial Storm!

September 20, 2023

A July 7 report from Statistics Canada on the financial state of Canadians says that, “Middle-income earners were affected most by inflationary pressures over the last year, as they spent […]

Read More

How do you Measure Your Financial Growth?

September 6, 2023

If you are reading this you probably have a keen interest in improving your financial situation — but how are you going to measure your progress? The easiest way is […]

Read More

It’s Time to Crush Your Credit Card Blues

August 9, 2023

Although credit cards interest rates have not been affected by the recent surge in the prime lending rate, the fact remains that credit card debt is usually the most expensive […]

Read More

RESP a No-Brainer when it Comes to Education Savings

July 19, 2023

Another school year is over, and we all know what that means…. your kids have inched another year closer to graduation and in many cases, heading off to another “school” […]

Read More

Debt Reduction Key as Interest Rates Soar

July 5, 2023

There are lots of reasons people fall into debt but only one way out — and it requires a combination of planning, discipline, and persistence. With the rise in interest […]

Read More
  • Find an Expert
  • Home
  • Mortgage Prep
  • Buying a Home
  • Renewal
  • Commercial
  • Rates & Lenders
  • More Value
  • Economic Insights
  • Our House Blog
  • MMT App
  • Careers
  • Contact
  • French
  • Find an Expert

© 2025 Dominion Lending Centres Inc. All rights reserved. Privacy Policy Terms & Conditions