Help your kids save with these four principles

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— image credit: Leader file photo

Consumer debt is one of the biggest obstacles to the financial wellbeing of Canadians, with the average household debt in 2013 at $1.63 for every dollar of disposable income, according to Statistics Canada. Not surprisingly, a recent study for Humanomics, an initiative by a group of credit unions to help improve Canadians’ financial health, revealed that 94 per cent of parents believe the solution lies in early education of youth about the value of savings.

Because habits formed early in life are so influential, we can take action today to prevent these spending and savings patterns from being passed on to the next generation. Based on the acronym SAVE, below are four principles that parents can use to guide their efforts to foster a lifelong commitment to saving in their children.


When it comes to children’s financial literacy, it’s especially important to keep things simple. Highlight the fact that smart money management simply aims to ensure that we are generally earning more than we are spending.  The goal is to put money aside during times of excess for use when funds are limited.

Also, teach your children that they can get started on saving by taking small, simple steps. In the Humanomics study, 67 per cent of parents indicated their children do not save any money at all each month. Have your kids set aside a small amount consistently and start with a small goal. If your child has a large monthly or annual savings target, chunk this down into a daily or monthly amount, to simplify the challenge.


By making your children aware of the problems of poor money-related choices, you can help prevent them from repeating past mistakes. The objective is not to scare your kids, but to be honest with them.

Help them understand that spending and savings habits are causing many Canadians to struggle with meeting their financial needs and obligations and leading to stress about their financial future. Let your children know you want to prevent them from this situation so they can enjoy a happy financial future.

If you are struggling with debt and saving as a parent, consider sharing this with your children and emphasize how sound financial habits from youth would have made a difference. Don’t forget to paint a positive picture as well – help your children connect long-term financial security and reduced money stress with good financial decisions today.


According to the Humanomics study I mentioned earlier, only 44 per cent of Canadians speak with their children about money, finances, budget and savings. However, our financial decisions have a lot to do with the value we place on money as well as values associated with money, many of which we pick up as children and youth.

As parents, consider what values you want to instill in your children to influence their attitudes towards money and saving. Emphasize that money is a means to an end, not an end in itself and teach them to value patience and sacrifice over instant self-gratification. Other values include respect for every dollar, a focus on needs over wants, and refusing to be influenced by greed or the desire to “keep up with the Joneses.”

Parents who can bring some core values to how their children value money (and who strive to live out these values themselves) will increase their chances of shaping healthy spending and saving behaviours in their kids.


The final principle for inculcating a saving habit in children emphasizes participatory learning. According to the Humanomics study, only 16 per cent of Canadian parents involve their children in money management decisions.

How can we use experience to make kids lifelong savers? First, parents need to model sound financial behaviours and if possible, explain their actions and reasons to their children. Depending on their age, ask for their thoughts and discuss their views.

Also, let your children save towards future purchases, rather than bankrolling their requests. And if your child is 11 or 12 years old, an excellent way to get started is to sign them up for a unique savings account being offered by credit unions involved in the Humanomics initiative. The annual limited-time offer savings account for Canadian youth pays a preferential interest rate and is available from May 1 to June 13. After one year, the financial institution will deposit a bonus of 20 per cent into the account, to a maximum of $100, and an additional five per cent bonus, up to $25, will be paid on the third anniversary of the account opening. It’s a great way for parents to give children the invaluable first experience of saving. For more information, visit

Applying the SAVE principles takes time and commitment from parents, but over the long-term, it can help establish the foundation of a sound financial future for your children.

Kathy McGarrigle is Chief Operating Officer for Coast Capital Savings, Canada’s largest credit union by membership size.






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