Financial literacy is a big part of lifelong learning. Teaching kids about money and the importance of saving starts right at the kitchen table. There are simple, teachable moments about money that can start people down a better path.

Parents can educate young people about where money comes from, how much things cost, and how to manage it. They can teach them self-control when it comes to money, such as how to save up for a coveted computer game, which helps them develop healthy spending habits. They can role-play with their children, or set up games using play money. They can have conversations about want versus need.

The importance of saving money

Parents’ role in teaching financial literacy carries through to the teen years, when young people get their first paycheques, manage cellphone bills, or start budgeting for clothes and entertainment. Parents can explain the long-term benefits of compound interest, or the importance of putting money away for post-secondary education, such as through a Registered Education Savings Plan, so the young person isn’t carrying around student loan debt post-graduation like an anvil.

How well these messages resonate comes down to how and when they are delivered.

The Financial Consumer Agency of Canada has online tools and resources to help along the way. The Canadian Financial Literacy Database has a wealth of programs and activities, including many for youth. The Canadian Bankers Association has a great resource covering financial literacy. Financial Literacy Month, held every November, with events and workshops, shines a national spotlight on the issue.

Getting over the communications hurdle

Talking with your child about money sounds great in theory, but it doesn’t always translate into practice. There are surveys showing that parents are more comfortable talking with their kids about topics like sex than finance. When it comes to schools, the Ontario government announced financial literacy as part of an updated high school curriculum, including having students prepare a budget for their first year after high school graduation. The British Columbia school curriculum has kids learning financial concepts as early as kindergarten.

Graduates of post-secondary institutions come face to face with a serious reckoning hours after graduation – a mountain of student loan debt. According to Statistics Canada, just 34 percent of graduates with bachelor’s degrees who have student debt pay those bills off within three years. The average student loan debt level is just over $26,000, StatsCan says.

And tuition fees aren’t exactly going down. Again, according to StatsCan, the average tuition fee for an undergraduate university program is $6,838 per year – and that’s before adding on costs like books, supplies, living costs and transportation.

Young people are feeling the financial squeeze

More and more young adults feel the cost of post-secondary education impacts them in a negative way. They feel stress about debt levels. They struggle with the cost of housing and they feel negative about entering the job market.

Student debt is an investment in the future so it’s considered a ‘good debt’ as opposed to consumer debt such as credit cards. But the spectre of paying back student loans does affect the individual long after graduation. They have more trouble financing a home and retirement savings seem out of reach. The increase in part-time work in the new gig economy means less job security and fewer benefits, which are further impediments when it comes to saving for retirement.

That’s why it is so important to educate young people about money at the earliest ages, right through their university years. Good habits to instill include:

• Building monthly budgets
• Understanding credit scores
• Starting a savings program
• Effectively managing bills and accounts

Down the line, a financially literate population will be good not only for families but the Canadian economy at large. Financial literacy is an essential life skill. Your children will thank you later.

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