Money management: Teaching children about finances amid current economic downturn

Canadians are sliding deeper into debt according to the latest numbers from Statistics Canada.

The agency notes the average Canadian owes almost $1.82 for every dollar of disposable income.

Finance experts say the current economic downturn can be a great learning opportunity for the next generation.

“Children are seeing headlines just like you,” said personal finance expert Barry Choi. “If you can explain to them what's going on, they'll probably feel a lot more confident.”

Choi is encouraging families to have the ‘money’ talk sooner than later. He suggests parents include their children in conversations about daily finances.

Personal finance expert Barry Choi. (Courtesy: Barry Choi)“Show them your credit card bill. Show them what you're spending money on and why you made those purchases. Then show them that you need to pay this money back or else you're going to end up paying interest.”

When taboo questions like “how much do you make?” come up, Choi says it’s an opportunity to educate your children about your job.

“Tell them about your job, how much money you make, the education required to get there. You want them discover different career paths, so they can decide for themselves.”

For younger children, Choi believes teaching the concept of delayed gratification will benefit them down the road.

“The idea is you want your kids to save early so they can buy something better or more important in the future,” he says.