Money can seem magical to kids. You wave a card above a machine, and they get a new toy, bike, or pair of sneakers. But you don’t want your children to see money as magical; you want them to understand the true value of a dollar and the importance of budgeting and saving. So where do you start? The good news is that opportunities to teach kids healthy financial habits are all around you, from the grocery store to their piggy bank to fun-yet-educational apps.

Here are five easy ways to make your kid money savvy:

1. Teach them the difference between needs and wants.

Sure, your child wants a video game or a slime kit, but they need a new jacket. If your child is young and you’re still paying for everything, explain that you’re saving first for what they need, but after that, you’ll save for the fun stuff—and ask them to narrow it down to the things they really, really, really want. If your child is older and is spending their own money, explain that they can save up for that shiny, nice-to-have thing after they’ve paid for the practical, need-to-have item.

The best part? Your child will appreciate their wants all the more when they’ve carefully considered and saved up for them. And maybe they’ll realize that a slime kit isn’t really what they want to spend their money on!

2. Use a piggy bank to teach little kids about interest.

Teaching kids that money can grow when they save, sparks their desire to save early on. To begin teaching your child about earning interest, a simple piggy bank is the perfect place to start. Get one that’s transparent so they can see their progress (a glass jar works just as well). Encourage your child to add regularly to the piggy bank (every bit counts!). Then when the piggy bank has some weight to it, add a second piggy bank. Here’s where you come in: Add cash to that second piggy bank to simulate the interest they have earned. For example, for every five dollars they put away in the first piggy bank, add 50 cents to the other piggy bank, and explain that this is their interest—or the extra reward they get for saving.

Over time, they’ll get to see how much their money has grown because they “invested” it. 

3. Open a bank account to show how money grows.

For older kids, open a high-interest savings account in their name to show them how money becomes even more money when they save it. Let them deposit money into it and encourage them to check in regularly online to see how their savings have increased over time.

You can also show them what’s happening with the money you’re investing on their behalf. Every few months, or every time you make a contribution to their Registered Education Savings Plan (RESP), show them how much the plan has earned in income and government grants. (Psst . . . CST Spark’s interactive online platform makes this really easy to see!)

4. Encourage learning through play with kid-friendly apps

Like hiding vegetables in pasta sauce, one way to sneak in some educational fun is with kid-friendly money-management apps. Virtual bank apps are great for kids as young as five years old, and there are tons to choose from. One called Bankaroo works like a virtual bank and lets your kids manage allowances, set saving goals, and report on how much they have spent. For kids who are trying to save up for a special something, Yuby can help them with that. The app lets them make a wish list of items and tracks their saving progress. For kids who are dreaming of becoming the next Jeff Bezos or Warren Buffett,  AdVenture Capitalist will provide hours of fun and also teach them about economics. 

5. Include your kids in financial decisions.

Sure, you’re not going to ask them what stock to invest in, but everyday money choices can be teachable moments. Next time you’re at the grocery store, you could explain why you’ve decided to purchase the generic crackers over the brand-name version. Say, “I find they taste the same and the generic ones cost 80 cents less.” You could also explain why you decided to buy an item in bulk or note an item that you plan to buy elsewhere because it has a better price.

Children learn by example, and letting them in on your financial decisions (even if they seem simple) can help set them up to be mindful consumers and savers.

As you’ve probably noticed by now, at CST Spark, we’re pretty passionate about saving early and investing wisely. If you haven’t yet opened up an RESP for your child, model good behaviour and start one today—while snacking on celery and carrots. Not only will the money you save have time to grow over the years (thanks to investment income), but you’ll also get government grants (yep, government money!) that your child can use for post-secondary education.

Since we’re a digital-focused company, you can apply for your RESP online and make changes or contributions to your RESP from the comfort of home. And you’ll love our planner, which lets you enter various contribution amounts to see how much your RESP could be worth come graduation time. In fact, it’s a great financial literacy learning tool for your child, too.

What are you waiting for? Open an RESP today with CST Spark from the comfort of your home in just a few minutes!

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