When Jason Heath, a certified financial planner with Objective Financial Partners Inc., in Markham Ont., is on a shopping excursion with his three kids, the 38-year-old dad has a convenient, ready-made response when faced with pleas for a new stuffed animal or treat.
The word starts with "N" and ends with "O."
"It's important to not always give your kids everything they want," he explains. "I say no more often than I say yes."
Mr. Heath is trying to instill family values in his children that place experiences above accumulating things. (Those stuffies will likely just end up forgotten in a heap on the floor within days anyway.) Teaching the kids to delay gratification now, he hopes, will leave an impression and help them stay out of debt as adults.
Giving their children a jump-start on financial literacy is a tactic that many thirtysomething parents are trying, particularly as they face 2017 with a pledge to get their own finances in order. Money is often a top stress at this age as mortgages, car payments, daycare costs and piano lesson fees converge.
"When you're in your 30s, you're definitely going into the more expensive time in your life," says Mr. Heath. "You're trying to figure out how you should be spending and saving your money."
Although a 2014 Ipsos Reid poll once revealed that just 18 per cent of parents spend a lot of time discussing financial matters with their kids, learning as a family has never been so important. Not only do we form our attitudes about money in childhood, but with ironclad company pensions going the way of the dodo, we can't depend on anyone but ourselves to deal with money management and retirement planning as we age.
It also certainly doesn't help that with quarters and dollars being swapped for credit cards and electronic banking, kids are finding the whole concept of money more difficult to grasp.
Gary Rabbior, president of the Canadian Foundation for Economic Education in Toronto, says he often hears from parents who worry they're the wrong people to educate their children. Maybe they're in debt and are still struggling to get out of it. Or they've made other serious financial blunders in the past.
"Understand that that has probably put you in the best position to educate your kids because you made mistakes. You probably learned from them and you can help teach your kids not to make the same ones," he says.
Here are a few tips to get you off on the right track this year.
No. 1: Start with yourself
If you've always struggled with money, or even if you've forgotten exactly how "dollar-cost averaging" works, it's time to read up. There are plenty of 101 personal finance books and magazine articles out there to get you started.
Or, better yet, hit the library or bookstore and grab one of the many money books written specifically for children. You can read these books together and likely learn something you didn't already know, too.
No. 2: Make it natural
What you teach will obviously depend on the age of your children – a three-year-old is obviously not ready to talk stocks and bull markets. But there's a better way to teach money concepts, regardless of age.
"Don't try to be a teacher," advises Mr. Rabbior. "The relationship between a parent and a kid is different than the relationship between a teacher and student."
In other words, learning should be an organic process, not a structured lesson where the whole family sits down at the table at 10 o'clock on a Sunday morning to discuss credit cards.
At the store and paying with a credit card? Talk to your nine-year-old about why you're using the card and how you'll need to pay off the balance before the due date to avoid paying an extra fee (called interest). Or let your six-year-old know that the cash you're withdrawing at the ATM doesn't appear by magic. You work for that money and it's deposited into the bank.
Gina Macdonald, a fee-only financial adviser and portfolio manager with Macdonald, Shymko & Co. Ltd. in Vancouver, teaches her four kids, aged 10 and under, about good spending habits while at the grocery store. They evaluate prices between large tubs of yogurt and lunchtime convenience packs. When comparing price and volume, the larger tubs are the cheaper, better bet.
"These are such basic life survival skills," she says.
No. 3: Make it fun
Go one step further and turn learning into playtime. Three- and four-year-olds love to play store and restaurant. Drag out canned goods, produce and cereal boxes from the kitchen and build a pretend store in the living room. Grab some coins and cut up paper to make bills. Then get shopping.
Younger kids can simply swap food for cash. But you can teach older siblings how to make change. The same lessons can be learned at a pretend restaurant, but you can also talk about paying tax and tip for those mud pies.
Meanwhile, smartphone and tablet apps like Hay Day teach older kids how to handle money, as well as concepts such as how supply and demand influence prices. Even a bare bones app such as Kids Money makes learning how to set a savings goal fun.
No. 4: Be a role model
Your kids are always watching what you do, so be sure to model the behaviour you want to see in them too. Ms. Macdonald says when she's out at the mall with her kids, she's the first one to put an item of clothing back on the rack – even if she wants it.
"I actually say to them, 'You know what? I don't have the money for that right now and I'm going to watch to see if it goes on sale,'" she says.
She'll also explain how that new shirt is related to her hourly wage. What does she have to earn – and how many hours must she work – to afford that item of clothing?
"It's a really good wake-up call," she says. "They get it."