Agency: Credit Counselling Service of Sault Ste. Marie & District

Topic: Kids and Money

Phone: 705-254-1424

Date: 5/3/99


Teaching Your Kids About Money


Financial values are a direct reflection of the personal values we gain from our life experience. They are shaped by feelings and attitudes that family members have toward money and social status. Skills and wisdom in managing money are developed as a child and are based on a combination of parents as a model, peer group attitudes and individual personalities.

Many children, in their innocence, believe in the proverbial money tree with an endless supply of cash. By about age eight, they can comprehend and logically think about money and this may be good age to consider a weekly allowance.

Administering Allowance

Talk about the differences between an allowance versus constant hand-outs. These are not benefits.

Let your children decide how to spend their allowances. Donít criticize their choices. Realize that they will learn from their mistakes and be supportive.

Never withhold the allowance as punishment. If denied, it will be difficult for your child to plan spending and this destroys early attempts at budgeting.

Encourage opening a savings account, preferably one with a passbook.

Base the allowance and its frequency on what your family budget can afford, not on what other children receive. A discussion of priorities may be in order to justify this point.

Teens and Spending

When dealing with teenagers, support their attempts at independence by allowing them to make more of their own decisions. A parent can help by giving teens greater responsibility in planning their personal needs and by including them in family financial discussions. Encourage them to set up a simple monthly budget, considering income and expenses, and reviewing it occasionally with them to avoid difficulties. Even teenagers need the experience of savings towards a goal to learn how to portion out their money.

While you and your teenager may not share the same tastes in clothing styles, your input on care, best buys, and colours will help them become wiser consumers. Encourage ways for your teen to earn extra money. In time, the allowance can be gradually reduced.


Remember, budgeting is not always taught in school. Learning money management skills in the home will provide your children with a sound basis for making realistic financial decisions throughout their adult lives.


"Helping you manage your debt" is a series of articles provided by member agencies of the Ontario Association of Credit Counselling Services. All agencies provide a range of no or low cost services to help people solve their financial problems and improve their consumer and money management skills. For more information about credit counselling services in Sault Ste. Marie, please contact Credit Counselling Services of Sault Ste. Marie & District, 298 Queen Street East, Suite 2, Sault Ste. Marie, ON, P6A 1Y7 or visit our website at