Parents Take Note: COVID-19 has put Financial Literacy Into Perspective
By Robyn K. Thompson
What started as a health crisis has morphed into a financial crisis. Now, the pandemic is upending education.
As parents across the country wrestle with the decision to send kids back to the classroom or continue remote learning, a great deal of uncertainty has settled itself into Canadian households. While reduced class sizes and staggered start dates seek to protect the health and safety of students, there are still many other factors weighing on the minds of parents.
For example, there are monetary impacts to consider. Equipping children with back-to-school supplies is adding to people’s budgets. Home-schooling, on the other hand, may reduce the number of hours parents can work, ultimately shrinking the family’s bottom line.
COVID-19 has put financial literacy into perspective. The economic fallout has served as an eye-opening experience for many Canadians and their understanding of money – a vigorous test that will continue in the months and years to come.
Amid so much uncertainty, one thing is for sure: the lifelong lesson of money is more important than ever.
This is especially true for younger Canadians. Youth unemployment rates are at a record high and postsecondary graduates will face an uneven, gruelling labour market for the foreseeable future. Coupled with soaring living costs, young people are starting off in tumultuous times.
With this in mind, it is essential that children are financially equipped and literate before they experience an unexpected event or emergency situation. Whereas many Canadians today are fighting an uphill battle of paying off debt, living paycheque to paycheque or spending beyond their means, future generations still have an opportunity to start with their best foot forward.
There is no silver bullet solution to financial literacy; it’s an educational process that requires patience and discipline – and it can start at home, now.
Kids as young as five – with brains like sponges – can begin to learn. At this age, parents can introduce the basic notion of money using concepts like a piggy bank or saving for a new toy. This helps them understand that things have a cost, that they are paid for with money, and that there is only a limited amount of money to be spent.
Soon, the difference between needs and wants can be reinforced; underscoring the importance of goal setting and the principle of value. It is critical to ensure goals are achievable in a realistic timeframe.
There are some basic principles of money that are immutable. The sooner children (and adults) are taught these fundamentals, the sooner they’ll become financially literate. For parents unsure of where to start, there are several free online programs that introduce the basics of money management and lay out the foundation needed to make smart financial decisions.
These lessons learned at home can also be consolidated by the enhanced financial literacy courses set to be implemented in Ontario and Alberta schools. These updated curriculums are an encouraging sign, regardless of whether and when children stay at home or go back to the classroom.
Being financially literate is a skillset. The ability to make smart, effective financial choices can help people avoid debt, while stretching the dollar and protecting them in the long run.
The pandemic has intensified people’s appetite and understanding for money. It has clearly underscored the need to teach and embrace the principles of financial literacy and ensure young Canadians are in good stead to face the economic challenges that life brings, whether those challenges are within their control or not.
Financial education from a young age will play a pivotal role in Canada’s economic recovery – the more we do now, the more we can safeguard ourselves in the future.
About the Author
Robyn K. Thompson, CFP, is a personal finance expert and president of Castlemark Wealth Management Inc. She is also a volunteer with JA Canada – a financial literacy program for students.