Giving Teens 'The Talk' About Money Management

Take a room full of 600 high school students, and spend the day trying to teach them about money. Can you say tough crowd?

Across the province and around the country there is a relatively concerted effort going on to develop curriculum for students. In Ontario, for example, there's a widely integrated approach underway to develop a financial literacy program which runs from grade 4, all the way through until graduation in grade 12.

Unfortunately, a lot of the kids graduating this year and next won't have the benefit of that education. It's a gap the Investor Education Fund (IEF) hopes to fill, to some degree, with their school assembly programming. This week, the IEF is kicking financial literacy month by hosting its first-ever youth summit in Toronto.

"We see the problems that we're having with our household financial management. Frankly, the expectations on households are much higher than they have been in the past," says IEF's president, Tom Hamza.

For example, he points out that 30 years ago, more people had the opportunity to retire with a pension. Credit availability has also changed completely during that time. "The system has shifted from an institutional responsibility for finances to personal responsibility. Education hasn't shifted with that. As a result, we have some real problems that we're starting to see in Canada today. They're not going to get better unless we address the education element."



To that end, along with their school curriculum initiatives, IEF and the Investment Industry Regulatory Organization of Canada (IIROC) have sponsored the Funny Money program for high schools, hosted by comedian James Cunningham. (To date, the program has reached more than 250,000 students across the country, and will make up a significant part of the youth summit on November 1.)

In speaking with Hamza, it seems clear that a fair amount of care has gone into focusing on student engagement.

"I wouldn't have expected to hear a pin drop, but you can," he says of Cunningham's presentation. "He speaks the right language. He gets the message across in a way that's riveting. At the same time, they're laughing, so they're engaged. That's the first step. The second is to keep the messages simple, and somewhat universal."

Using practical examples – what it will cost to buy an iPod outright with cash, compared to what it will cost if students use credit and only pay the minimum balance, for example – summit organizers hope their grade 12 participants will come away with an understanding about the basics of debt, credit debt in particular, cash flow, compound savings and the need for a long-term view about money.

"Most students have not formally thought about financial literacy or financial topics. If we're going to have their attention, we need to focus on the core nuggets – debt, cash flow and long-term savings," he says. "Having them aware of the problem, and aware of the resources available to them, is critical to having them start to address these issues over the long-term."

There are a number of interesting facts reported in IEF's most recent Youth Financial Literacy Study, that seem to reinforce the need for this effort to provide better financial education in schools.

It found:

Those students who felt their school provides all or most of the personal finance information they need, are twice as likely to talk about personal finance, compared to those who felt their school hadn't provided them with adequate information.

These students are also twice as likely to "always budget" compared to the others.

Conversely, the likelihood of not budgeting at all is 42 per cent for those who felt their school hadn't provided them with adequate information. This drops to 18 per cent for those who felt their school provides all or most of the information they need.

Students who have been shown how to budget are far more likely to do so.

Still, personal finance is something that most high school students only think about occasionally, if at all. (One-third say they rarely, if ever think about their personal finances.)

Despite having a high level of interest in saving for post secondary education, less than one-third of high school students are actually saving for this goal.


Some 69 percent of high school students think it is important for schools to teach them about personal finance, up from 57 per cent in 2009.

Only 21 per cent say their school has provided them with most of the information they need. The number is a big jump from 12 per cent in 2009, but IEF also notes that almost half of students surveyed said their schools provided only a bare minimum of information (26 per cent) or no information at all (21 per cent).


Related articles:
Teaching Kids About Money
Adult Children Living in the Basement
All About Allowances
The Money Secrets Your College Student Is Keeping From Mom and Dad
Why Mom Didn't Teach Us About Investing


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Kate McCaffery is a freelance writer, editor and former urbanite, now living somewhere in between the lake, the ski hill and some farmer's cow path. Visit mccaffery.ca/kate2.0/ for more information.