Teaching Kids Money Management Skills May 2 & 3, 2006 Ainsley Cunningham

Who I am, Who do I work for and What do I do? Ainsley Cunningham, B.A., B.Ed. The Manitoba Securities Commission Education and Information Coordinator

Agenda Why should we teach kids about money management? When should we start? How do we do it? –Model –Guide –Practice

Would you rather…. have $10,000 or a penny a day doubled for 30 days?

Why - No one told me this was part of the deal Parental Responsibility Raise independent children Exercise good judgment Practice responsible habits Balanced lifestyle Live independent lives part of a household and community

Why – “Can you spot me a $20”? Kids have the resources Canadian Tweens (ages 9-14) spend 1.9 billion annually. (YTVmedia.com) Canadian teens (ages 13-19) spend ___ billion annually. (YTVmedia.com) Tweens influence 20 billion in household purchases annually. (YTVmedia.com) Kids spending habits

Why - hook them when they are young Time is on their side To teach good habits To recover from market ups and downs Few financial obligations Handout – Compound interest

Power of Compounding AgeInvestedValue 19$2000 $2,200 20$2000 $4,620 21$2000 $7,282 22$2000$10,210 23$2000$13,431 24$2000$16,974 25$2000$20,872 26$2000$25, $1,035,161 Total Invested$16,000 !0% rate of return

Power of Compounding AgeInvestmentValue 27$2,000$ $2,000$ $2,000$ $2,000$ $2,000 $ $2,000$ $2,000 $ $805,185 Total Invested$78,000 !0% rate of return

Why teach Money Management Some of the hard facts Divorce rates on the rise Debt is at an all time high Money matters affect every aspect of our lives Cost to achieve our dreams

When do I start to teach them? I know enough about me and my money management style. The earlier the better When they show an interest As early as age five

How to teach kids about money Model Take a trip to the bank Talk about finances Have a savings system – envelopes/jars

How to teach kids about money Model Pay yourself first –Saving $10 a week gives you $520 a year. It is easy to save loose change by: –Bringing your lunch to school –Taking the bus, riding your bike or car pooling –Cutting down on double lattes or number of movies you go to –Borrowing books from the library

They’ve got the money now what? Model Spending – more immediate Saving - short term Investing – long term Donating – for others Here is a tool

How to teach kids about money Guide - Allowance what is its purpose? To teach money management skills –not tied to chores –tied to chores

How much should I give? Guide Per age Per grade Per chore Use coins *Its not about how much you give them it is about how you teach them to manage it*

They’ve got the money now what? Guide Spending – more immediate Saving - short term Investing – long term Donating – for others Work with them to use the bank

How to teach kids about money Practice Take them to the bank Talk to them Surf the web together Play shopping games Fill out charitable donation gift card

They’ve got the money now what? Practice Spending – more immediate Saving - short term Investing – long term Donating – for others Use the piggy bank!

Serving up some great ideas Things that work Things that don’t

Resource Books Newspaper articles

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Contact Information Ainsley Cunningham Manitoba Securities Commission St. Mary Avenue Winnipeg, MB R3C 4K5 (204)