Early Financial Literacy

We often become what we repeatedly do because we are creatures of habit, and usually the best way to form a habit is to start early. 🙂

In a book I once read, Secrets of the Millionaire Mind, there’s a story about a successful professional who makes a six-figure salary and lives in a nice house with expensive cars. But for some reason he never has any savings. Despite his high income he’s always in debt. His net worth is negative, his investments tend to under perform, and he’s living paycheque to paycheque. The root of his financial struggle lies in his childhood. When he was growing up his parents were poor. They resented rich people, and blamed economic inequality and other social problems on money. Growing up in a household where money was considered bad and corrupt gave him the notion that having a money is bad. As an adult being wealthy would give him a sense of guilt. So whenever he makes money he would subconsciously try to spend it all. Many people lack the skills to take care of their own money because they were either never given the proper management tools to begin with, or were simply misinformed. By not forming good financial habits at an early age consumers might have a hard time getting out of debt when they become adults.

A recent survey by Consolidated Credit, a non-profit credit counselling service, shows that roughly a third of consumers had to turn to family or friends for financial help at one point.


Not surprisingly the biggest challenge for many when facing financial hardship is being unable to pay for housing.

Becoming financially literate.

The way to tackle financial literacy can be done on two fronts. At home parents need to make financial education a priority in their household. At school there should be a full length course for basic personal finance. Children have to learn to work with money instead of being afraid of it or being told that money will lead to problems. The lack of knowledge is usually what leads to economic problems later on in life. It’s important to instill in children responsible spending habits and budgeting skills from an early age. 🙂 As Aristotle once said, “Good habits formed at youth make all the difference.

Random Useless Fact:
Some 40% of Canadian families carry an outstanding balance on their credit cards, with a median amount of roughly $3,000.


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12/02/2014 6:38 am

It amazes me at how many people have this weird relationship with money…they spend it and dont care about it and yet lament that they dont have any. Good conclusion and I totally agree that parents and schools should include basic personal finance in the education of a child.

Thanks for sharing

12/02/2014 7:30 am

Reminds me of my brother. Debt up to his eyes yet he makes three times more than I do. He just spends and spends while I just save and save. He has been through 7 cars I lost track…smashed his TL… Totalled a two week old 4 Runner… Omg the list just goes on and on. We grew up in the same household in a middle class family. It really depends on the person I think. Not their upbringing.

Clarisse @ Make Money Your Way
12/02/2014 1:22 pm

Honestly, during my childhood years, my parents didn’t talk about money with me but I can remember my mom told me once that I should avoid debt and I always keep that in my mind. Some people even if they have a good income every payday but surprisingly they also have many debts, they are still living paycheck to paycheck.

12/02/2014 5:22 pm

I’ll be the contrarion here, if the majority of people weren’t somewhat foolish with their financial choices, it would be very hard for financially wise people to earn extra income through investments and investment growth. Sure we can work, plan, save etc and grow our piggy bank. However, companies, governments, economies rely extremely heavily on people spending all their money or even more.
Of course it may be selfish to think this way as an investor but there’s always the other side of the coin.

I do agree about parents teaching their kids some decent values so they can avoid the huge disasters at least, and that in our education system there should be some very basic finance component. I for one will never forget a period of a few minutes in appx grade 11 where my math teacher taught us compound interest and showed us charts. Nobody seemed to care one bit, I paid very very close attention.

My 2c

12/03/2014 9:03 am
Reply to  Brian

I agree.. It is good for the economy and EVERYONE when people spend a healthy amount of their income… However, what has really gotten us into trouble is the debt side of that and people spending money will beyond their income and what they can afford…

The loan companies, pay check advance, and other finance arms have made money HAND over FIST on these poor unknowing folks with them paying interest on many thing in excess of 200-300% of the amount of the original item…

Spending is good but don’t spend more than you have in your pocket and yes save some of it also..

Brian So
Brian So
12/04/2014 3:36 pm
Reply to  Tim

I agree with you Tim. We need people to spark the economy by spending their income, but there’s a balance between spending and saving that creates a healthy economy. If everybody turned into a saver then the profits of the companies we invest in will shrink and we’d lose money on our investments. But if we all spent beyond our means then our retirements will suffer. So it’s all about striking that balance of spending and saving, even if it means that some people spend frivolously and others do nothing but save.

No More Waffles
12/03/2014 1:22 am


That’s the weirdest rationale I’ve ever read. “Because my parents were poor I now have to spend all my money.”

It sometimes baffles me to see how people deal with money. Only last week someone asked me how her pension fund worked because she had absolutely no clue, even though she had been contributing to it for two years already. Her face when I asked her “so you’re putting money into something that you don’t understand at all?”. Priceless.

Many money problems could have been solved if children received a proper education. I’ve been shouting for years to introduce a basic personal finance course in schools, but that doesn’t seem to be on top of everyone’s list.

Best wishes,

12/03/2014 3:55 am

Finance is probably the single biggest failure of education. It is increasingly important these days for survival where it could be safely ignored 50 years ago except for the elite.

12/03/2014 9:07 am
Reply to  shaurz

I have mixed feelings on whether it NEEDS to be taught in school or not. There are MANY of us who up to this point were never taught such information in school and we all seem to have the concept and are doing it fairly well…

I think parents should teach and give their kids HARD advice when they are reaching Highschool age so they don’t screw themselves over in life, but again it is their choice when they choose to live that way and to not change their behavior..

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12/04/2014 8:01 pm

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