Smashing the Piggy Bank Money Mystery: Kids' Bank Accounts Teach Financial Literacy

By Penelope Graham
Ratesupermarket.ca

Who knew that the piggy bank – the pink, jingly staple of childhood bedrooms everywhere – could be causing so much harm? Turns out, the secretive stashing nature of the beloved banks enforces the mystery surrounding personal finance matters for Canadian children. According to RateSupermarket.ca, Canada's independent rate comparison site for financial products, a far more effective way to teach kids about money matters is to open a children's bank account – and involve them in every step of the process.
Allowing your child to manage his or her own account imparts valuable lessons when it comes to understanding hidden fees, picking a product based on its merits – even how to use a debit card responsibly. It's these fundamental skills that give kids an edge on understanding personal finance – and growing into financially successful adults as a result.

"There has been a lot of talk about the fact that children are not being taught Financial Literacy in schools, but in my opinion, learning about saving, spending, and the value of a dollar is something that should really be part of a child's education – even before they enter school," said Kelvin Mangaroo, President of RateSupermarket.ca. "As a new parent myself, I am very motivated to teach my daughter about money from very early on. But I'll probably wait until she's eating solids first."

In a world of global economic uncertainty, the importance of teaching financial literacy can't be denied – effectively showing kids how to manage their money early on could be what saves us from another generation of credit card denial and high household debt levels.
When you consider the swipe-happy behaviour kids witness on a regular basis – for example, parents will be shelling out $677 in August alone for back to school, according to VISA Canada – it's vital they learn the real value of a dollar.

Here are a few more of RateSupermarket.ca's suggestions for raising a financially-savvy child:

• Allowance should be earned, not automatic. Your children can earn money by completing age-appropriate chores.
• Help them spend their money once they've saved enough for an item they want. Show kids how to shop around for the best price and enable them to understand that they're in control of their money.
• Teach kids the value of donating. Giving money away is a profound lesson that teaches children to understand the value of a dollar
• Teach your kids to compare financial products and make good choices based on educated decisions, such as rate of return, and transaction fees offered by different lenders.

RateSupermarket.ca is the largest impartial rate comparison service for personal finance products in Canada. Founded in May of 2008, their easy-to-use comparison engine provides much needed transparency to the Canadian financial market and allows visitors to quickly find the best mortgage rates, credit cards, bank accounts, and GIC rates.