Ages 13 to 17: Teaching teens to budget + MORE Aug 24th

For Canadian college and university students, the days of being able to rely on summer-job savings to cover the cost of tuition and rent, and maybe even have some extra cash for food and books, are long gone. About half of students graduate with debt, with their average amount owed approaching $28,000. 

Back in 1989, for example, Ontario’s minimum wage was $5 an hour. Assuming a university student clocked a 40-hour work week for all 16 weeks of their summer break, they would earn $3,200. At that time, the average cost of a full year of tuition was $1,185, according to Statistics Canada—meaning university tuition would eat up just over a third of a student’s pre-tax income. 

Today, minimum wage has grown to $15.50 an hour in Ontario, but the average cost of one year of full-time undergrad studies has increased by 576% to $6,834, for the 2022/2023 school year. Assuming that same working schedule, a student would earn $9,920, meaning tuition would account for about 69% of a student’s pre-tax earnings…

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It happens so fast you could miss it. But in their teens, kids need to start moving from thinking about money in small amounts (weekly) to larger amounts (monthly). “They should start getting more money for longer periods of time, but now they also need to start taking personal responsibility for some spending categories themselves,” says Certified Financial Planner Trevor Van Nest. So if you were giving them $20 a week, you may want to give them $80 monthly plus a bit extra for new teen expenses like music subscriptions and clothes.

Empowering teens with their money

This is also a time when many teens will get a part-time job. But whether it’s summers at the local fair or a few shifts a week at McDonald’s, you can help them out by talking them through concepts like minimum wage and negotiating hours of work so they maintain a work-school balance. Most teens will also be anxious to know why money is coming off their paycheque for taxes, employment insurance and the Canada Pension Plan…

Money is the greatest teaching tool of all time. And when you throw kids and parents into the mix, it has the power to change lives. Years back, I watched as my own preschool-aged children, Luca and Laura, figured out that if you’ve got cash, you can get stuff. The summery jingle of the ice-cream truck was enough for them to drop any toy they had in the sandbox and bolt into the house demanding a couple of loonies for ice-cream—QUICK!—before the truck left. As my pockets were picked dry daily, I realized it was time to start teaching them the value of money.

Money experts will tell you I probably started too late. “Kids should be given a bit of spending money as soon as they are old enough not to eat it,” says Certified Financial Planner Trevor Van Nest. “Learning about money will be a lifelong process for them.” In fact, Van Nest and other financial experts generally agree that kids as young as two often understand more about money than parents give them credit for. “Just by watching you buy things at the store, they quickly figure out who has the power,” says Minnesota-based financial educator Ruth Hayden…

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