Recipe for raising a financially-literate kid

Preparation time: 20 years


  • At least one child (more if you are up for the challenge)
  • Your words
  • Your actions
  • Toys
  • Money
  • Piggy bank
  • Debit card
  • Credit card
  • Various investment vehicles of your choice (i.e. stock, GIC, etc)
  • Patience
  • Imagination
  • Fun


This is one of those recipes that may turn you off because of the amount of work involved and the length of the preparation time. However, making anything great requires time and effort, and the end result makes it all worth it.

Step 1: Start off by teaching your baby/toddler to take care of his toys. Taking care and appreciating our possessions helps fight the need to constantly purchase more new stuff. Use the toys to teach the child to share. This will eventually turn into donating, which is important part of financial literacy. It shows that we are thankful for what we have and want to help out the less fortunate.

Step 2: Once the child starts asking you to buy him things, it is time to start frequently adding a good measure of pep talk as to where the money comes from, how mom and dad work hard to earn money and have to make choices about how to spend our money.

Step 3: When your child is about 5 years old, start giving allowance. The allowance is supposed to be a teaching tool for money management. It may be tempting to withdraw the allowance for misbehaviour, but I urge you to withdraw other privileges such as TV or computer time instead. This way you will not deprive your child of an opportunity to manage and learn about money. You should gently guide the managing process, and let the child learn from mistakes while the dollar amounts are low and stakes are not high.

Step 4: Make sure that as soon as the child receives any money, a portion is saved in a piggy bank or a savings bank account. Explain that by saving money as soon as it comes in, we are paying ourselves first before we spend the rest of the money by paying others.

Step 5: Teach the everyday important money management skills like budgeting, couponing, price matching or how to look for the best deal.

Step 6: Buy a stock for your child of a company that they admire like Apple. Follow the stock and the company, then buy a different investment vehicle such as a GIC.

Step 7: Discuss the advantages and disadvantages of debt and credit cards. Explain credit interest, credit rating and credit history. When your child turns 18, have them apply for a credit card, and for the next couple of years closely monitor and coach credit card use.

Sprinkle each of the above steps with fun and imagination for more enjoyable experience, and don’t forget to add a generous helping of patience.

Enjoy and show off your creation!

Maya Kuc Corbic, CPA, CA is a financial literacy expert. She is an experienced Chartered Professional Accountant and the founder of DINARII Financial Education Academy, whose mission it is to teach children and youth financial literacy skills. They offer fun and engaging workshops to schools. They also hold workshops for parents and provide tools so that parents can continue teaching personal finance at home. You can follow Maya on Twitter: @Educ8Money2Kids, or Facebook: Dinarii Financial Education Academy.

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