Teaching Money Management To Kids Starts With Parents: Kevin Cochran

Does father always know what is best? Yes – the majority of the time. But when it comes to setting a good financial example for his kids, father, and mother for that matter, deserve a "C". That's according to a quarter of Canadian parents who participated in an Angus Reid poll in May. It's a sobering reality that 92 per cent of moms and dads grapple with every day.

But it's not because parents don't want to. In fact, many parents believe that they are responsible for providing their kids with a solid financial education – they just haven't got around to it. Some parents feel completely unprepared when it comes to bringing up the topics of setting financial goals, investing, money management and using credit wisely.


Sweeping the subject underneath the proverbial rug isn't the answer. In fact, that's a classic recipe for a financial crisis. Kevin Cochran, the regional director at Dominion Lending Centre, learned money management the hard way. Just two years after he graduated from high school, Cochran found himself in over $20,000 in debt because he used his credit card to pay for his car.

"I had no idea how they [credit cards] worked," says Cochran. If he had learned financial management from at least one of his parents, he may have avoided his rocky introduction to adulthood.

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Putting an end to denial
It's a vicious cycle that keeps repeating itself. "The reason why most kids can't save money is because their parents can't save money," says Cochran. Fortunately, you can break the cycle by educating yourself and your children.

There's no shame in not having all the answers right away. A father's role goes beyond the archetypal stern, powerful, controlling motif; a father is an open-minded teacher who has a profound influence on the development of a child. So, with Father's Day around the corner it's the perfect opportunity to make your son or daughter's financial education a priority.

Watch. Read. Repeat.
After spending a decade figuring out a system that he and other parents could use to bridge the gap between needs, wants and realistic goal setting, Cochran says that he has the answer to Canada's financial literacy problem. He calls it enRICHed ACADEMY Smart Start for Financial Genius -- a step-by-step financial literacy program aimed at young people. The program is the result of hours of speaking engagements at dozens of high schools. Surprisingly, the students that he spoke to were always engaged and hungry to learn more about money and career management.

"At first, I thought that this was going to be really boring, but it was actually really amazing. I'm glad I came," says one teenager after experiencing one of Cochran's lecture.

The program consists of five DVDs and a 95-page workbook that breaks down credit card statements item by item; demystifies mortgages; explains how to choose a financial advisor, and more. It also has inspirational quotes from people such as Martin Luther King and actor Ashton Kutcher.

What is age appropriate?
Yes, talking about money can be dry and complicated matter, however, children are resilient and a lot smarter than some adults give them credit for.

David Bach, author of the Automatic Millionaire and Start Late, Finish Rich got his first financial literacy lesson from his grandmother at age seven. While on a visit to McDonald's Grandma Bach asked him to walk up to the counter and ask the manager if the company was publicly traded. She already knew the answer (yes), but she wanted him to know how to ask the question.

Or, in Cochran's daughter's case, financial literacy began even earlier –- at age two. How? By giving her an allowance of three dimes a week. She also has three jars to manage her money: a charity jar, a spending jar and a savings jar. As each of his three children gets older the allowance monetary value increases.

Dave Chilton, author of The Wealthy Barber and The Wealthy Barber Returns, taught his kids an important lesson on materialism that still endures today: people who are less stuff-oriented are happier.

That being said, I think novelist Oscar Wilde sums up the modern family dynamic perfectly in this quote: 'Children begin by loving their parents; as they grow older they judge them; sometimes they forgive them.'

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