

Saving
Saving for later is a critical habit. Saving, including a piggy bank, can start very early in a child’s life. Once in school, you can take your child to a bank or credit union to set up a student savings account. Explain how savings accounts keep money safe, allow interest to be earned, and provide a buffer against future expenses.
When opening the account with your child, determine the account’s purpose. Is the account to save or also to make purchases? Do you want your child to have a debit card and access the account online? Discuss privacy with your child, including keeping the password private and what to do if a debit card is lost or stolen. Also, discuss post-secondary tuition fees and future vehicles as potential significant goals.
Spending
Perhaps as critical as saving, proper money management entails learning to spend wisely, keeping in mind opportunity costs. Teach your child how to distinguish between ‘needs’ and ‘wants’ and evaluate each potential purchase this way. Discuss how money saved today might be better spent on other opportunities in the future. Also, talk to your child about how trends change and how marketers try to convince consumers that the latest clothes, shoes or games are ‘necessary’ to fit in and be accepted by peers.
Go to the shopping mall with your child only to avoid getting sidetracked by unexpected impulse buys. Be sure to try on or try out an item at the store before purchasing it and consider looking elsewhere before deciding, including online. Discuss how to compare value between items, services and stores. If your child is fixed on a particular topic, inquire if they are willing to give up other purchases to get that item. Also, find out what the store return policy is. Suggest a break away from the mall before making a high-cost decision. In this cooling-off period, your son or daughter may more easily part from the desired item.
Provide a monthly or seasonal allowance for clothing, meals and entertainment to allow your child to practice independent budgeting. Suggest that your child give charitably as well. I recommend gently used items instead of always buying new ones. Also, suggest a part-time job if your son or daughter is set on designer brands.