Giving the next generation a bright financial future
Charlene MacLeod, CPA and her family sitting on their front step. (Photo by Darren Calabrese)
For many CPAs, the most important financial advice they’ll often share with others doesn’t happen at a boardroom table. It instead takes place in conversations over the kitchen table with their kids. Or at the grocery store, or when planning family vacations or when answering questions about their kids’ financial futures.
According to the Organisation for Economic Co-operation and Development, Canadian youth have a financial literacy score which “corresponds to a fluency in commonly-used financial concepts,” but were under-equipped with advanced topics like buying housing, investing and saving for retirement. The same 2018 multi-country assessment still found only one in ten youth across 117,000 was performing at the highest level.
With housing prices and the cost of living booming, it’s more critical than ever for youth to have a good handle on financial literacy early. This can help them avoid making costly financial mistakes while building their credit and net worth.
Increasingly, Canadian youth are taking financial education into their own hands, learning from self-professed experts on Instagram, TikTok or YouTube. But the quality of advice varies widely and can come from people without experience or training. While provinces have been peppering curriculums with financial literacy in recent years, it rarely has the prominence it needs and teachers are often not qualified to answer sophisticated questions students may have about these topics.
That’s why for about a decade, CPA Canada has been taking a grassroots approach offering what they state as “unbiased, functional and clear financial literacy information to the general public.” This includes presentations by CPA volunteers to elementary, middle and high schoolers. The goal? To supplement their financial literacy with information developed and presented by respected experts.
Since some of the most critical financial literacy education starts at home, in honour of financial literacy month, Pivot spoke with some CPA parents about the lessons they’ve shared with their kids to set them up for their financial futures and what actions can help the generations to come be more financially literate.
Charlene MacLeod, CPA
Halifax, N.S.
Sole Practitioner
Parent of two, ages 8 and 5
“Our family was very open with money, only because we didn’t have any,” recalls Charlene MacLeod, CPA. “We also didn’t have any debt.” This helped inform her view that it isn’t necessary to live beyond your means to have a meaningful life.
After graduating university, she viewed an accounting career as a path to a financially stable future. And today, as a parent, she doesn’t want her kids to learn financial literacy later in life or the hard way, like she did. “I think they need to learn that as foundational skills of life.”
MacLeod feels it’s important for her kids to know that money is earned. When they want to save up for the biannual book fairs at school, it’s time to figure out a way to earn their spending money.
“They always default to a chore chart,” she says. The kids design the chores they want to do, assign a financial value to each and then negotiate a price for doing it. Though they learn several lessons at once, including the reward of hard work, it’s something MacLeod says the kids, especially her eldest, have fun with.
“It’s important to stick to beliefs and values when teaching financial literacy. If they learn them at this age, they’re going to cruise as adults”
Sometimes when the kids compare themselves to others, and wonder why they don’t have things like unlimited book fair money or an in-ground pool, it creates challenging conversations. “In some cases, they could have that if we just gave it to them, but we choose not to do that.” Though parents want their kids to have the world, MacLeod says it’s important to stick to beliefs and values when teaching financial literacy lessons. “If they learn them at this age, they’re going to be cruising along as adults.”
MacLeod’s advice for other parents is to make financial literacy lessons child-led, and to share them in ways that fit with their personalities. While her eldest loves chore charts, she believes there are better ways to engage her younger daughter. “I’m still trying to figure out the way in which she likes to learn, so stay tuned.”
Cary Lavine, CPA, sitting with her family in their home. (Photo by Nathan Cyprys)
Cary Lavine, CPA
Toronto, ON
Retired CFO and Entrepreneur
Parent of two, ages 26 and 21
When Cary Lavine’s kids were growing up, he and his wife had no grand plan for teaching financial literacy. Even doling out an allowance wasn’t consistent in their home. Though they bought a book about raising financially literate kids, they seldom opened it. Instead, they tried to “walk the talk rather than just talk about it,” says Lavine, which included by paying attention to price tags when they shopped. This was similar to how he learned, particularly from his “careful with money” chartered accountant father.
“I really didn’t have a lot of insight into my parents’ financial situation,” he says, aside from the broadest strokes. “My parents had very different financial situations, so I got to see both sides of it.” Lavine and his wife were more open about finances when his kids were growing and feels this helped set them on the right track.
Now that they’re grown, his approach has become more direct. Around a year ago, Lavine’s son came to him with a finance question. Lavine started answering, but realized his daughter probably had the same question and hadn’t raised it. Then he thought the same could be true of the nieces and nephews in his tight-knit family. That’s why he called them up with personal invitations, put out a spread of food and hosted about a dozen of the 18-to-thirty-somethings and their partners to talk about their finances.
“A lot of it rests on having a decent relationship,” Lavine says. “I don’t know if you can create that just for the sake of a financial literacy workshop.” The experience got Lavine interested in sharing financial literacy which he now does as a CPA volunteer presenter.
Lavine’s noticed a divide when he does presentations for students. They come in with a bit more knowledge, depending on their socioeconomic status,” he says. Lavine can remember elementary schoolers in higher-income neighbourhoods asking about investing, but not their lower-income counterparts.
He has spoken to them about how small increments can make a difference. For instance, if kids save a loonie per week for a few years, eventually this will turn into a sizable pile of money. “Some kids are coming from pretty poor homes, but we all can make small changes and those small changes add up,” he adds. “Compounding is one way.”
CPAs in the classroom stand out from teachers, he says not only because it’s a different voice, but someone with specific, applicable knowledge. “I think that we have an advantage in what we’re delivering because we’re CPAs.”
Jodie Leigh Schultz, CPA, and her family (Courtesy of Jodie Leigh Schultz)
Jodie Leigh Schultz, CPA
Leduc County, Alta.
Sole Practitioner
Parent of three, ages 10, 8 and 6
Growing up, Jodie Leigh Schultz learned a lot about budgeting from her parents. “We talked about having a credit card and making sure that you pay off the balance monthly,” she says. They also instilled in her to only take on debt for constructive purposes, not simply for consumption. These are the lessons that she still passes down to her own kids, though sometimes it can come into conflict with what they may learn elsewhere.
“I don’t really think that financial literacy is a big focus academically in their schools,” Schultz says. Recently in one child’s class, the teacher mentioned that anyone who didn’t have enough money to spend could use credit cards instead. “Which is not incorrect,” she adds. “It’s just different than the lessons that we teach.”
That’s why Schultz and her husband (also a CPA) feel responsible to “model the behaviours that we want them to have and to have conversations with them,” just like her own parents did. Sometimes this means letting her kids learn lessons through trial and error.
Earlier this year, one of Schultz’s kids emptied his piggy bank on a toy store visit. Then a few weeks later, on holiday, he wanted to buy a souvenir appropriate to the Drumheller, Alta., region—a toy dinosaur. It wasn’t expensive, and though Schultz says it would have been of no consequence to buy it for him, it felt better not to. “He could try and realize sometimes he is going to have to prioritize how he’s spending his money.” It paid off: her son ultimately pieced together that by spending less at the toy store he could have bought the dinosaur, and she’s hopeful such lessons will stick.
When her kids get older, Schultz would like to speak to their classes at school about financial literacy, in part to help combat misconceptions. “I think for a lot of people money is a stressor,” Schultz says, and she believes it’s unfortunate to frame financial literacy in this way.
“Sharing information is a good way to try and help set up youth for success in the future in terms of their money management.”
Scott Elliott, CPA, and his family (Photo by Remi Theriault)
Scott Elliott, CPA
Ottawa, Ontario
Retired Comptroller and VP Finance
Parent of two, ages 28 and 25
Scott Elliott rose quickly through the corporate ranks to become a controller at 25 and later a vice-president of finance, but his early career days involved working multiple jobs to make ends meet. He remembers financial challenges in his twenties like working multiple jobs to pay for school, paying one credit card bill with another to keep afloat, even keeping a part-time job at a wine store while he was working his first accounting job. These experiences made him want better for his daughters.
“I’ve always explained to my daughters that being financially independent is all about choice”
“I wanted them to be able to be financially independent as much as possible,” he says, allowing them to not only avoid hardships but not to be forced into particular life situations because their limited finances kept them there. Now in their twenties they have six-figure net worths, as opposed to what he describes as “negative net worth” when he was their age. “I’ve always explained to them being financially independent, it’s all about choice,” he says. A few years ago, Elliott’s oldest daughter decided to change careers, which involved moving home and going back to school. “She would not have been able to do that if she didn’t have some financial independence,” he says.
Early on, Elliott’s daughters learned about financial trade-offs. “One year I gave them an option that we get a new piano for the house, or go on a trip down south,” he remembers. The family vote resulted in the piano which still sits in his home today. When the family planned a trip to Australia, Elliott made the girls contribute a small part of their allowance toward the trip. The small amount of money would not make or break the vacation, he says, “but it really puts a mindset in them from an early age.”
He sees his past work as a controller as the experience that steered him toward helping others with financial literacy, including those junior to him, those on the same level and those in higher positions. “A lot of managers don’t necessarily have the financial literacy that they need sometimes,” he says. This is even true of people in VP and c-suite offices. “That’s why it’s important to start young.”
MORE ABOUT FINANCIAL LITERACY
CPA Canada hosts a range of free financial literacy resources, including publications, worksheets, surveys, and webinars. And we encourage members to share their knowledge and expertise as a financial literacy volunteer.