! Tips

Put 10% of your pay into your own savings! - "Paying yourself first" is one of the oldest rules you should know about saving. It may be difficult but ideally you should put at least 10% of the money you earn into a savings account right away, before purchasing anything or paying any bills.

Set realistic spending parameters! - If you only get to spend 25% of your own paycheque as discretionary income, make sure it is the same for your child. Have them put the majority of their money away, and save it. They may not want to be restricted with spending but it helps prepare them for the reality of "starting salaries" after leaving home.

Teach them about "real life" expenses - Using the Mentor Budget Sheet, talk to your child about the "real life" expenses they will incur when they are older and living on their own. Show how your own paycheque gets allocated. Make sure they understand how to support themselves with the money they earn - it isn't all about having the cash to buy cool things!

first job

Your child may be a few years away from their first "real" job, but you can still talk about it. Even mowing the lawn, babysitting or walking the dog are all jobs if your child is paid to do them.

it Activities

Talk about pay and paycheques

One of the ruder discoveries of growing up is the realization that you cannot spend your entire paycheque on entertainment. You actually have to use it to pay bills and support yourself. As a child, you tend to spend everything you earn, which leads to an unrealistic idea of what your discretionary income (money you can spend on yourself, after you have paid your bills) will be.

If you can help your child to spend within their means when they are young, they will have a much easier time doing it when they are older.

Help put the cost of things they want in perspective by working it out on an hourly basis. If they want to buy something that costs $50.00 ($56.00 with sales taxes), and if they get paid $8.00 an hour, minus taxes and deductions, then the item will cost them a full day of work.

When your child gets their first paycheque, go through it with them. Explain the taxes that are being deducted, CPP, and any other deductions they may incur. Talk about a plan of attack for managing the money. Ideally, everyone should be putting at least 10% of every paycheque into an investment or savings account. Try to make sure this happens before they even touch the money. For example, if their pay is deposited into a chequing account, your child may be able to set up an automatic transfer of 10% into a separate savings account.