Jennifer Snyder is a typical — and atypical — high school student who likes to go to the mall and hang out with friends.
Snyder, 16, works a part-time administrative job at her dad’s office twice a week, earning $10 an hour. The Grade 12 student gets no allowance but her monthly income ranges from $300 to $400.
Snyder, who lives in Burnaby, doesn’t feel confident in her money management skills. She says her spending decisions are largely spontaneous.
“I kind of know about finances but I’m not very good at it because I don’t go with my own advice. Sometimes I’ll promise that I can save a lot more money by not buying food when I go to the mall or an event. But I always usually end up doing it.”
In this gap between knowledge and an ability to apply that knowledge, Snyder typifies the broader B.C. population. In a poll conducted by Ipsos Reid for The Province, 54 per cent of adult British Columbians say they do a fair or poor job of applying what they know about personal finances.
But in another crucial respect, Snyder is ahead of people with far more years on their heads. In a sustained act of self-discipline, Snyder tries hard to save about $50 each month.
Half of British Columbians of all ages save money only occasionally or not at all, according to the Province/ Ipsos Reid poll.
All too soon, Snyder and the rest of B.C.’s teenagers will find themselves swimming in a financial world whose complexity may overwhelm those with poor habits and scant knowledge.
The Province/Ipsos Reid poll shows that young adults aged 18 to 34 grapple with financial problems more severe than they are for any other age group. They are reeling from unexpected expenses, struggling with high levels of debt and finding it hard to save money.
Credit Counselling Society CEO Scott Hannah warns that it’s no longer enough for young people to become competent money managers: They have to become far more competent than their parents.
As safety nets such as fully-indexed pensions disappear, tomorrow’s world will increasingly throw people back onto their own resources, Hannah says.
“We’re failing our kids,” Hannah says. “They’re not being exposed to financial concepts in their households and they’re not being introduced to them early enough at school.”
Fresh evidence shows Canadian parents are not doing their job when it comes to teaching children financial literacy. A survey just released by Bank of Montreal shows only half of parents — 54 per cent — have talked with their children about household finances.
Thirty-seven per cent of Canadian parents are not certain their children have a firm understanding of the essentials of money management, the poll shows.
Kwantlen Polytechnic University financial educator Robert Ironside says the Western world has embraced a culture of debt in which it is socially acceptable for people to live beyond their means.
B.C.’s schools have a vital role to play in helping to give youth the knowledge and skills to free themselves from that debt mindset, Ironside says.
“If we can bring it into the school system early on and run it through the curriculum all the way through Grade 12, students will see it just as a part of life. They will see it just as important as learning how to read, learning how to do arithmetic,” Ironside says.
B.C.’s high-school curriculum has one mandatory course, Planning 10, that addresses financial literacy and personal money-management skills.
Snyder says she remembers very little from the full-year class. She is unfamiliar with investment vehicles such as RRSPs and mutual funds.
“When I talk about finances, my brain isn’t wired to be interested in that stuff,” she says. “The class, it made me think that I have to save more, but I probably don’t remember much because we didn’t do a lot on managing money.”
Hannah believes Planning 10 would be more effective if students were introduced to finance sooner.
His organization will soon launch a pilot project in Surrey school district that Hannah says will be unique in Canada.
The project will see the society work with a core group of teachers to help them introduce money concepts suited to students in Grades 5 and 6.
“We want to be able to take this from a Grade 5-6 level all the way up to Grade 12 and expand it out beyond to other school districts,” Hannah says.
The project is on hold until the current labour dispute between the province and teachers is resolved.
Nancy Phillips, president of DollarSmartKids Enterprises in Kelowna, says that parents who think a few personal finance courses in school are enough are making a mistake.
Parents can improve kids’ future financial health by nurturing good attitudes and habits from an early age, Phillips says.
Two of the most important behaviours to encourage, she says, are self-control and a sense of personal responsibility.
Phillips urges parents to avoid the mistake of paying for everything for their kids.
It’s important for young people to use their own money for some purchases so they learn to distinguish between needs and wants, she says.
Parents should also work with children to draw up a budget. This lets them set and achieve financial goals, and get inspired by their own successes, Phillips says.
“More people have financial problems today due to the fact that they’re daily overspending than they do from any stock market investment mistakes. A lot of people never get to invest their money in good investments because they don’t have any to invest.
“It’s those daily decisions that are absolutely critical to long-term future financial well-being. And to make those good decisions on a daily basis they need to become habitual during the teen years when they’re exploring what independence is.”
— with files from Paul Luke