If your kids are young adults attending postsecondary or starting their first foray into the working world and you’re still doing their taxes and helping with finances, you’re not alone. Many parents (and kids) have trouble cutting the cord, especially when it comes to money matters. Fortunately, there are ways to help set them up for financial success and independence.
1. Make time for teaching. Don’t discount this obvious tip — many parents neglect teaching the basics of personal finance because it’s just easier to do it themselves, while kids are often too happy to remain blissfully ignorant. Educate your children on how to make a monthly budget, calculate regular expenses and auto insurance. Teach by example, and break down how you do this with your own money. Ask a relative or friend to do this if you think it would be better coming from them.
2. Speak with a financial planner. A financial planner can help your young adult find the best place to keep their money, like a Tax-Free Savings Account or Registered Education Savings Plan if they’re planning on further schooling. Earn a bit of interest on your student loans by keeping the money in a high-interest savings account. It’s also never too early to start planning for financial goals like paying off student loans and saving for bigger expenses like a first home down payment.
3. Master online banking together. Online banking is the perfect way for young adults to take control of their finances because they can do it from their laptops and smartphones, spaces they’re already very comfortable with. Get them to take charge of their taxes by signing up for direct deposit for their income tax refund, GST/HST credit, and other tax-related payments. It’s the fastest, safest, and greenest way to get their payments. This way, if they decide to move or travel with their newfound economic freedom, they’ll still have access to their money and you can forget about mailing them their payments. Sign up for direct deposit by visiting your financial institution or go to directdeposit.gc.ca for more information.