Talk to your children about money. Even if you’re stressed | Canada Voices

Here’s an important tip for increasing the financial comprehension of our children: Talk to them regularly about money at a young age, even if we feel stressed about employment, debt and whatever else is weighing upon us.

That’s one of the key takeaways from a survey released this week by Vanguard Canada. It found that parents who talk to their children about financial issues pass along a deeper understanding of concepts such as using credit cards and maintaining bank accounts.

On the other hand, parents who clam up about financial matters in a misguided attempt to shield their children from stress, risk passing along a double whammy of challenges to their offspring.

Their children are less likely to understand basic financial concepts at a young age, when it is important to introduce those concepts. Their children are also five times more likely to feel anxious about financial matters themselves – given that children can form their relationship to financial matters based on what they witness or overhear at home.

“Not talking about money is actually not helping,” Sal D’Angelo, who currently leads Vanguard’s product and marketing teams, told me during an interview last week.

“That’s not something we expected to see. And it is really relevant for the times.”

The survey, conducted by Angus Reid in March, was based on online responses from a total of 1,014 Canadian parents of children under the age of 18. It was designed to get a better sense of how money issues are being discussed at home.

Among those who self-identified as financially stressed, 68 per cent said they feel pressure to hide their worries from their children – either because they believe their children are too young to understand or they don’t want to trouble them.

But 70 per cent of these children are overhearing stressful conversations about money matters anyway, contributing to their anxiety. And no, financial stress doesn’t necessarily relate to low income, high debts or unemployment.

“Financial stress can hit anyone,” Mr. D’Angelo said. “Even people with more significant means may have their own financial stress. Their business could be under pressure or tariffs could be impacting them.”

Talking to our children about financial matters, though, may deliver significant benefits.

For example, 44 per cent of children with parents who discuss financial matters regularly understand the concept of credit, according to Vanguard. That number drops to just 15 per cent for children of parents who stay quiet about these matters.

The age at which we introduce these concepts to our children is also important.

Financial curiosity peaks between the ages of 10 and 14, according to Vanguard. Yet, 88 per cent of parents don’t begin meaningful conversations about financial concepts until 15 and beyond, which gives these children a slower start and puts them at a disadvantage relative to peers.

So, having meaningful conversations about money matters is the obvious solution to these challenges. According to the survey, 86 per cent of participants said that parents should take the lead in teaching kids about money.

But parents believe that schools can offer an important line of support, too, particularly for children from households where financial concepts are not being discussed.

That’s why Vanguard introduced its MyClassroom Economy digital program in Canada last year, after more than a decade of use in the United States. It is available – for free – as a teaching resource for all grades, giving students hands-on experience with concepts such as salaries, rent and spending decisions.

It doesn’t replace the need for regular conversations about financial matters at home. But as an add-on, it’s designed to bridge a gap for some children.

Where and when did you pick up your initial knowledge about financial matters? Let me know at [email protected]. I’m on vacation this week but back after Labour Day.

David Berman’s personal finance reading list: school edition

Back-to-school shopping, but cheaper

There is no magic solution to saving money on school supplies, whether your child is just starting out or embarking upon a university degree. But a little coaching can go a long way, and I like the point here about assessing what you already have.

Parents: Your RESP is a potential gold mine

One way to think about the benefits of making regular contributions to your child’s Registered Education Savings Plan: With the right approach, you can count on doubling your money.

Make smart RESP withdrawals to maximize the financial benefits

One type of withdrawal is taxable. Another type is tax-free. That means parents need a strategy when it comes time to finance their child’s post-secondary education.

Chart of the day

Canada may be embroiled in an escalating trade war with the U.S., but mortgage markets aren’t blinking yet.

New products that caught my eye

There is a case in favour of the Osprey Nebula 32 Daypack as the best school backpack (or many other uses, for that matter). It’s not cheap. But look at that: It’s now 25-per-cent off at Mountain Equipment Company, until Sept. 7.

In the social sphere

Watch

What the heck is going on in the bond market? That’s the question Ezra Klein addresses in this New York Times podcast, which addresses a baffling period of rising U.S. Treasury bond yields and unusual intervention by the Treasury Secretary, Scott Bessent.

The money-free zone

What is it about high school movies that make them so appealing? From laughs to nostalgia to the uncomfortably close parodies, this is a big category. Here are 50 titles worth checking out.

ICYMI

Globe and Mail stories from the last few days