Parents must help educate kids about financial literacy, says expert

A financial literacy expert says it is more important that ever for young people to have a strong financial literacy backbone.

"Life is so much more financially complicated than it used to be," said Gary Rabbior, the president of the Canadian Foundation for Economic Education, on CBC's Island Morning.

Rabbior is on the Island today to speak with Grade 10 teachers about financial education on Friday.

Where financial literacy once involved understanding how to use cash and a chequing account, now people also have to be aware of the endless scams that try to separate people from their money, as well as know about things like credit cards, RRSPs and TFSAs.

On the Island, financial literacy is being added as a compulsory component of a Grade 10 course, a move that Rabbior applauds.

"Kudos to P.E.I.," he said.

Rabbior says parents must also play a key role in educating their children about financial literacy. He recommends they try to engage their children and not act like a teacher.

He says some of the important things to teach them about are what credit ratings are, as well as the importance of tradeoffs.

"Every financial decision you make has a tradeoff," said Rabbior.

Free resources available to parents

He says understanding this is important because it will make kids pause before making decisions.

Rabbior is also the author of a book called Money and Youth, which can be downloaded for free from the website of the Canadian Foundation for Economic Education.

Rabbior is the president and CEO of the foundation.

He also recommends parents check out the website Talk With Our Kids About Money to learn more about how they can engage their kids.