Three reasons why it has never been more vital to teach teens about money:

1.) It’s getting harder, but not impossible, to afford life events like home buying, raising a family and retirement.

2.) Social media keeps altering the personal finance world by, first, amplifying the fear of missing out, or FOMO, and also by giving a voice to personal finance and investing influencers who range from excellent to misleading and fraudulent.

3.) New channels for buying things keep appearing; social media, smart home devices and wearable devices like smartwatches are some of the latest examples.

In a recent newsletter, I replied to a reader asking for thoughts on what his son’s high school finance club should talk about and then asked for more input from subscribers to this newsletter. My goal was to build a sort of curriculum for parents and teachers that can be used for helping teens learn about money.

The replies I received were excellent – yet another example of how this newsletter thrives on two-way conversation. Here’s a selection of comments, in no particular order:

  • What is a credit score, and why does it matter?
  • Managing the cost of subscriptions to streaming services
  • Understanding how social media can influence people to spend
  • The cost of owning a vehicle vs. a car-sharing membership
  • Learn how to file a tax return, and the importance of filing a return each year
  • An explanation of how interest rates work
  • A comparison of employment opportunities and average compensation levels to taxes, apartment rentals and other lifestyle costs
  • Donating to causes and associated tax credits
  • The benefits of online banks versus traditional brick and mortar banks
  • How to travel in a cost-effective way
  • How tax-free savings accounts, first home savings accounts and registered retirement savings plans work, and when to use each
  • The benefits of learning a trade versus pursuing a college or university education
  • Understanding paycheque deductions for Employment Insurance and Canada Pension Plan premiums
  • How to spot financial scams, and who to report them to
  • The benefits of long-term investing in quality dividend stocks

A lot of suggestions focused on the importance of investing, including the magic of compounding. My thinking is that investing is the sexiest topic in personal finance, but it ranks behind basic money management in importance. You have to be able to afford to invest.

ROB CARRICK
PERSONAL FINANCE COLUMNIST
The Globe and Mail, October 15, 2024