How to Be a Financial Role Model for Your Kids

The good news? You don’t need to be a financial guru to set a great example. You just need to be intentional. Let’s break down how to teach kids about money at different stages of life—and how to make sure your own habits are worth copying.  

Teaching a 5-Year-Old About Money  

At five, your kid isn’t reading stock market reports—but they do understand cause and effect. This is the perfect time to introduce basic money habits.   

• Allowance = Learning Opportunity: Give a small allowance whenever your budget allows, but do it with purpose. Consider dividing it into three jars: spending, saving, and giving. This teaches them that money isn’t just for instant gratification. 
• Let Them Make Choices: At the store, if they want a toy, let them decide: spend now or save for something better later? The earlier they learn to avoid impulse buying, the better their future finances will be.   
• Lead by Example: If they see you constantly tapping your credit card, they might think money is endless. Try explaining what you’re doing when you pay: “I’m using my card, but I have to pay this money back later.” 
  
  

Talking to an 18-Year-Old About Credit Cards

Fast forward to 18, and things get real. They’re probably getting their first job, first car, and—if you’re not careful—their first taste of credit card debt.   

• The Credit Card Talk: Explain that a credit card isn’t free money—it’s a tool. Used wisely, it can build their credit score for things like renting an apartment or getting a car loan. But paying only the minimum balance? That’s a fast track to financial stress.   
• Teach Them About Interest: A simple way to illustrate it: If they charge $500 on a credit card with a 20% interest rate and only make minimum payments, it will take over nine years to pay off—and cost them $584 in interest!^[1] 
• Introduce Saving & Investing: Encourage them to open a TFSA (Tax-Free Savings Account) and start investing a small amount. Even if it’s $25 a month, it teaches them that money can grow when it’s invested wisely.
  
  

Have Open Conversations About Money

One of the best things you can do? Talk about money openly. Too many people grow up thinking finances are taboo—and then struggle to manage their own.   

• Make It a Family Conversation: Instead of stressing about bills behind closed doors, involve your family in age-appropriate ways. Use simple, clear language with younger kids, and get more specific as they grow. A five-year-old doesn’t need to know your mortgage rate, but they can understand that “we’re saving for something important.” 
• Answer Their Questions Honestly: If your kid asks, “Are we rich?” or “How much do you make?,” don’t dodge the question. Instead, match your explanation to their age and level of understanding. That way, they grow up confident, not confused. 
• Use Real-Life Examples: Share a time when you saved for something big—or even a time when you learned from a financial mistake. Real experiences tend to stick better than lectures.
  
  

Be the Example They Need

You can’t teach good money habits if you’re not practicing them yourself. The best way to be a financial role model is to lead by example. Here are three tips:

1. Stick to a Budget. If you tell your kids to save but you’re constantly overspending, they’ll notice. Show them how to track spending, set limits, and make compromises.

2. Plan for the Future. Having clear goals, an emergency fund, investments, and insurance all create financial security. When your kids see you planning for the future, they’ll learn to do the same.

3. Explain Your Decisions. Kids don’t just copy what you do—they absorb how you think. When you have to say no to something, take a moment to explain why: “We’re not buying that right now because we’re saving for our family vacation.” It helps kids learn how to weigh trade-offs and think long-term.

4. Stay consistent. Small actions add up over time. Whether it’s investing a little every month or making smart spending choices, showing consistency teaches kids that financial success isn’t about luck—it’s about good habits.
   
   

You Don’t Learn This Stuff in School

Unfortunately, schools don’t teach much about borrowing, investing, or financial planning—but that doesn’t mean your kids can’t learn. If you want to give them a head start in life, start today. 

The best part? You don’t have to do it alone. A SISIP Advisor can help you build a solid financial plan—for you and your family. Book a chat today and start shaping the next generation of smart money managers. 

And, if you really want to boost your knowledge, sign up for the Money Mastery portal. It’s full of resources to help CAF members and their families learn about financial resiliency—and put it into action.