Kids and money sense

Help them understand debt
WHAT TO DO: “If you buy something for your child on your credit card, show him the bill when it comes in and explain how you must pay for the item now, even if at the time you just handed a card to the store and it looked like nothing was happening,” says Godfrey. And make sure that your kids know prepaid cards such as phone cards cost money to buy upfront and need to be used wisely.

Godfrey also advises charging interest if you loan money to your kids. “It can be a low rate, but you
want to remind them that borrowing costs money.”
Once your teen has mastered the art of saving, budgeting and balancing a chequebook, a bank debit card or prepaid card can be a good trial experience before getting a regular credit card. If you let him practise with this kind of plastic, he may fare better when he heads off to university or enters the working world.

THE PAYOFF: A good credit rating will make it easier for your children to find their first apartment and get better rates on insurance when they start to drive.

Walk the talk
WHAT TO DO: Be a good financial role model. Think about the messages you're sending your kids. Do you live at the mall and stock up on stuff you don't really need, or shop smart and limit those impulse buys?

TIP: Talk to your kids regularly about the importance of paying bills on time, long-term savings, etc. “You have to talk about money with your kids in the same way you talk about sex and drugs,” says Godfrey.

THE PAYOFF: If you act as your kids' personal money mentor and teach them how to manage their finances, chances are they will take those lessons with them when they leave home and – bonus! – won't be calling for bailouts.