Raising Money-Smart Kids: A Q&A With Robin Taub

As parents, it’s important that we raise financially literate children. Indeed, financial literacy is a skill that can enable our children to look after themselves, raise financially savvy children of their own one day and be good stewards of family wealth. By equipping our kids with the right knowledge, skills and confidence to make responsible financial decisions at each life stage, we can help them avoid future financial anxiety and expensive money mistakes while encouraging healthy financial habits.

But as with most important skills and values we try to impart to the rising generation, financial literacy shouldn’t be left to chance. Instead, consider using an intentional strategy that leverages age-appropriate tactics to help guide you and your children on this journey. To help you in doing so, I spoke with Robin Taub, CPA, CA, award-winning author of the best-selling book The Wisest Investment: Teaching Your Kids to Be Responsible, Independent and Money-Smart for Life.

Through the following questions and Ms. Taub’s responses, I hope you’ll gain valuable insight into how you can embark on your family’s own journey to achieving financial literacy.

What is your professional background, and how did you end up where you are today?

After university, I began my career as an accountant at Big Four accounting firms KPMG and EY. But I’m not your typical accountant! I quickly transitioned into the real estate industry and then left to work on the trading floor at Citibank Canada, marketing derivatives to banks and credit unions.

The 2008 global financial crisis and the Great Recession that followed created an awareness about the importance of being financially literate and capable. Seeking more flexibility (I had two young kids at the time), I decided to launch a business creating financial content. Over the years, I’ve collaborated with major financial brands, such as Tangerine Bank, Royal Bank of Canada and TurboTax.

How did you come up with the idea for your book, The Wisest Investment?

CPA Canada, the governing body for chartered professional accountants in Canada, approached me to write the book. I was chairing a council on women’s leadership in the profession, so they were familiar with me and my work in financial literacy (and they knew I had two children). Their research found that most parents feel they don’t have the information they need to teach the right lessons about money, and they don’t know how to approach the subject with kids of different ages. But they do recognize they need help, and they are willing to listen and learn, so they commissioned me to write a book to help parents.

When my two children, Justin and Natalie, were young, I started to invest in their financial education. I knew that the earlier kids were taught about money, the greater the likelihood of financial success throughout their lives. I tried to put my money where my mouth was and be a good financial role model to them. I took advantage of teachable moments to build money lessons into our daily lives, and I made sure that the information I shared with them (about earning, saving, spending, sharing and investing) was appropriate for their age and maturity (and I still do). I could see my efforts were paying off.

Why not write about my own experiences — both rewarding and challenging — and the experiences of other parents? That, combined with solid research, would help other parents give their kids the knowledge, skills and confidence that I gave my own.

I wrote A Parent’s Guide to Raising Money-Smart Kids, and it quickly became a Canadian bestseller. In the decade since it was first published, society moved away from cash toward mobile and digital money, and the pandemic has only accelerated this move. The Wisest Investment is an updated edition that builds on time-tested lessons that have always applied and still apply today while modifying some for the post-pandemic “new normal.” It also addresses both the challenges and benefits of managing money in an increasingly digital world. Over the same decade, my kids have grown into financially literate, independent and responsible young adults (most of the time!).

Why is teaching kids about money the “wisest investment” a parent can make?

The wisest investment you can make is in your kids. Kids who don’t learn about money management from a young age:

• Will be lacking a basic life skill that could lead to financial struggles and expensive mistakes down the road.
• May suffer physical and mental health consequences of financial stress and money worries.
• May start to form bad habits, like living beyond their means, which become difficult to break as they get older.

But if we do teach our kids about money, they:

• Will be financially literate, having the knowledge, skills and confidence to make responsible financial decisions at every life stage.
• Will be financially independent and responsible — off the family payroll, using good judgment and making sound financial decisions.
• Will have a sense of purpose (not a sense of entitlement) and be motivated to achieve something on their own.

As a parent, when is the right time to start teaching your kids about money? Is it ever too late to start teaching your children about money?

The right time to start teaching your kids about money may differ by individual child (even within the same family), but it begins when they start expressing interest or curiosity about money. Often, that happens around the age of five, when they start kindergarten.

Ideally, if parents start early, kids can make mistakes when the stakes are low and learn from them. But it’s truly never too late to start. Even parents who themselves don’t feel like they’re doing the best job with money can learn together with their kids. It may even lead to improvements in their own financial habits and health as they become more skilled in understanding, practicing and explaining money management.

Teaching a 5-year-old about money surely requires a different approach than teaching a 25-year-old. Can you share some general approaches to talking to young children vs. teens vs. emerging adults?

The general approach at every age is to talk about the Five Pillars of Money: Earn, Save, Spend, Share and Invest. As your kids go from being young children to preteens to teenagers to emerging adults, the Five Pillars never change, but the specific topics and examples for each of the Five Pillars become more sophisticated.

Any information you share with your kids should always be age appropriate, accounting for their age, maturity and temperament. If it’s beyond their level of understanding or stage of life, they’ll be lost; and if it’s below, they’ll be bored and tune out.

For example, don’t talk to your 5-year-old about digital wallets, but do let them pay in cash for items they can relate to, like a banana or an ice cream cone, so they can begin to understand what things cost. Don’t try to get your teenager to start planning for retirement. Rather, talk about savings goals that are relevant to their stage of life, like going to college or buying a car.

In your book, you talk about “teachable moments.” As a parent, how do you identify those moments and effectively leverage them to teach your kids about money?

They’ll come up often because money, in all its forms, is ubiquitous, and we’re always transacting. Think about a typical day. Your kids may accompany you to the ATM as you withdraw cash or to the grocery store or mall and watch you pay for things using a debit or credit card or perhaps a digital wallet on your phone. Take the time to explain what you’re doing, and build a money lesson into your daily lives. One family I met even used their home renovation as a lesson in budgeting.

While there are many expected advantages to teaching your children about money, what have you found are some of the unexpected benefits parents may realize as a result of teaching their children about money?

Parents may be surprised at how much they learn from their kids, especially as they get older, in a kind of reverse mentoring. Our kids are digital natives, and using digital tools comes naturally to them.

My kids and my media and marketing manager, Lauren Robilliard, also keep me up to date on what the big issues are for their generation (right now, inflation and housing affordability) and how they stay financially literate (YouTube, Reddit).

What is the number one money habit to teach your kids?

They need to learn to pay themselves first. What I mean by this is that they should prioritize saving. I always recommend doing this by setting up an automatic transfer. I really believe it’s best if it’s automatic because then they don’t even have to think about it. They can have the money transfer directly into a savings or investment account, where it can grow and compound over time. Even though they may struggle with it in the beginning, they will eventually learn to adjust and live within their means.

How have you seen financial advisors play a role in helping educate future generations?

Financial advisors I’ve spoken with and observed are helping to educate and empower their clients and their families by creating or curating age-appropriate tools and resources such as books, knowledge centers, online courses, podcasts and live events. They also act as a bridge between generations. They help facilitate family discussions about sensitive matters like estate planning or act as a neutral third party to diffuse tensions.

In your book, you talk about parents educating themselves about money so they can lead by example. What are the biggest opportunity areas for self-education for today’s parents? Where are many of today’s parents not living up to expectations?

Financial advisors provide tools and resources to their clients; parents can self-educate by reading books and newsletters, visiting unbiased and objective financial websites/knowledge hubs, taking online courses, listening to podcasts and attending live events.

Parents are important role models for their children in all areas of life, including money. But if parents feel like they’re not good with money themselves or they have bad financial habits, they may not be living up to their own expectations in this area. And if you teach your kids well, older siblings can also be important role models for younger kids.

What else do you think is important to add?

Giving our kids knowledge and skills alone is not enough. What sometimes gets overlooked is the importance of passing down our family values. Family values can act as an invisible framework to help guide and prioritize financial decisions and set meaningful goals.

I think it’s also noteworthy that of the Five Pillars of Money, Share often gets the least attention. But philanthropy and giving back teaches your kids to be compassionate and can put things into perspective if they’ve developed an attitude of entitlement.