The ABCs of $1-2-3s | Part One

Jason StubinskyPartner & Vice-President | Caldwell Advisory Investment Advisor | Credential Securities Jason is an enthusiastic lifelong learner, brimming with ideas to help his clients maximize their portfolios. He encourages…...
August 7, 2019
by Jason Stubinsky

I Know What You’re Thinking

It’s the summer, it’s vacation time, and (as much as you might be eager for your kids to be back in the classroom and out of your hair for a bit) the last thing on your mind is school.

But I want to spend a few minutes today talking about an important topic that affects our families and our ability to enjoy things like school, and vacations, and many of the other comforts of life we enjoy and, occasionally, take for granted. As Ben Franklin said, “An investment in knowledge always pays the best interest.”

Financial Literacy – How We Understand Our Money

If you’re like me, this was a topic that was often discussed around the kitchen table growing up. Mom handled the finances and I will always remember going downstairs to this massive wooden desk (funny how it looks smaller now that I’m an adult) and my Mom would have bills and receipts and statements in an organized layout like a massive jigsaw puzzle. I had an idea of what that was all about but didn’t know the meaning of it.

As a child my lessons were cemented in one-sided discussions that went something like this: “You want that toy? Well, save up your money and buy it. Go door-to-door and cut grass in the summer, and shovel driveways in the winter.” I remember running to the drive-in after a Friday night or Saturday night movie, collecting the empties and exchanging them for quarters to spend at the arcade.

Lessons We Learn at Home

Fast forward to today, and I am now applying the lessons I learned in my childhood home (along with what I have learned since) to the challenge of raising my own children. I am raising them with a healthy attitude towards their dollars and cents – or I am trying to raise them that way, at least! I am sure my fellow parents of young children can relate to this challenge.

To help kids succeed, and maybe make things a bit easier for parents, the Ontario government is rolling out a financial literacy curriculum this fall. According to the Ministry of Education’s website, kids in grades 4 through 12 will learn about “citizenship, economic understanding, personal finances, and consumer awareness. Financial literacy builds students’ understanding of personal finances, the local and global economy, and the results of their choices as consumers.”

However, our parental responsibility doesn’t end when the school bell rings for the day. School will provide our children with some of the basics, and it becomes our job to interpret, augment, and adapt that knowledge to put it into practice and create understanding. It’s up to us to make meaning of it.

Here Are a Few of the ABCs of Financial Literacy to Frame this Important Conversation

A: Autonomy. It is hard doing something you have never done before – like making a budget, investing, or even opening a bank account. Believe it or not, a third of Canadians say they are either underbanked or unbanked – meaning millions of Canadians either do not have a bank account or they are at least partially reliant on payday lenders or cash advance services.

Not only is it important to open a bank account and make a budget, but it is also important to talk about why you are doing these things (or not doing these things) and to involve the kids in the discussion. Providing your children with an increasing amount of autonomy – of independence and free will – will prepare them when it becomes time for them to make their own financial decisions. For younger children, an allowance is an important first step in this journey.

B: Balance. This one goes out to those slightly older kids who might think the training wheels are ready to come off. Especially when those first few paychecks come in, it is mighty tempting to think about all that the money could buy. A hockey jersey. A new bike. Movie tickets, a shopping spree, or a new smartphone.

Legendary investor Warren Buffet says, “Do not save what is left after spending, but spend what is left after saving.” In other words, pay yourself first – and he doesn’t mean by loading up on stuff. What he means is to set aside a portion for school, for other important purchases (hello first car!), and for emergencies.
You can enjoy some of that hard-earned paycheck – just make sure to save some too.

C: Create a plan. How do you decide what to save and what to spend? You plan!
Some households use a budget template to help them keep track of income along with expenses such as a mortgage or rent, utilities, groceries, transportation costs, and the like.

While children may not have these kinds of expenses, they may need to budget for other costs. This could include accounting for school savings, planning for a big purchase, making sure you have spending money ahead of a family vacation, or other milestones. In some faith communities, giving (also called “tithing”) may be a consideration. Give every dollar a job!Young child learning to tie his shoes

D: Discuss. As parents, we only want the best for our children. Remember how excited you were when you were teaching your child to take their first steps, tie their shoes, or even ride their bike?

Less than one in four kids in a US survey by T. Rowe Price said their parents spoke frequently with them about money – to say nothing about the quality of those conversations! The majority of parents say they are uncomfortable with the idea of discussing their finances with their kids, and I suspect it is because we may have our own bad financial habits – not saving as much as we should, or making a few too many impulse purchases, or not sticking to our budget. Perhaps we worry we are not ‘qualified’ to teach.

Yet our kids are not seeking perfection from us. Did you expect your child to master bike riding the first time without any falls? Through knowledge, demonstration, and practice, they can become financially ready for the off-roading that awaits them in their adult years.

E: Education. What we’re doing right now! This can take many forms: reading books or listening to podcasts, meeting with a financial advisor, doing online research, or – as of this fall – going to grade school in Ontario.

Most of us will spend a good fourteen years in grade school and kindergarten, and then move on to higher education. The skills we acquire are particularly geared so we can get a job and support ourselves. Yet how much time do we spend educating ourselves on how to manage the money coming from that job?

You wouldn’t step into a kitchen for the first time and expect to prepare a gourmet meal. No one is an excellent driver when they are behind the wheel for the first time. Likewise, you need to invest time and energy into your skills as a financial manager.

We know this can be a challenging topic. So, for those of you with young kids, we want to make things a bit easier.

Moonjar for teaching children about financesA MoonJar moneybox is designed to teach kids about money and budgeting. This unique toolbox features three components – save, share, and spend – and is designed to help children and families incorporate strong financial values and practices. Best of all, they’re a Canadian company!

The first five families to send us a home-made video of 60 seconds or less outlining why they need/want a moon jar will receive their very own MoonJar! You can send your video to*

We hope you have found this post helpful. Remember: make the discussion with your kids fun and playful but most of all make it happen!

Stay Tuned for more on the ABCs of Financial Literacy – Coming Soon!


*Please, send your video by August 31/2019. This is a limited-time complimentary offer. No purchase is required. Only the Moonjar winners will be contacted. Caldwell Wealth & Estate Advisory has the right to end or modify this promotion at any time. Other restrictions may apply. Only applicable in Canada unless otherwise noted.


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