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Financial literacy - one of the most important lessons you can teach your children

Like learning their ABCs and 123s, financial literacy is one of the most important lessons you can teach your children.

We are inspired by the saving skills of one of our Meridian Youth Members who is a keen student on the path to financial literacy. 

Nine-year-old Liam Janzen is learning the value of the adage “a penny saved is a penny earned,” but that’s not all. By adopting smart money habits young, he is learning a life-long lesson in financial responsibility and independence, cost comparison and the importance of philanthropy. With the guidance of parents Bill and April, both Meridian Credit Union Business Members, he is learning essential life skills. 

Setting goals
“I’m saving for Yoda’s Jedi Interceptor, (it’s a Lego set); Beyblades and a video game called Subnautica,” Liam explains. “I have $32.82 saved.”

He needs to raise a total of $60.40, which is actually more than the sum of his three purchases, because his money is expected to go further. 

“Ten per cent goes to church, ten per cent goes to savings, and the rest is for spending money,” Liam explains.
Teaching responsibility
“We started to give Liam money he could work with around the age of 5,” Bill said. “We’ve done a few different things; allowance or payment for certain jobs, we’ve put money in the piggy bank, stuff like that.”

Bill explains he was raised similarly, having an allowance and chores, and both he and April are avid budgeters. 

“We wanted to transfer those kind of principles and values and pass them down,” Bill said. “We try not to say yes to everything, because you can’t say yes to everything kids want to buy anyway. But if there is something really important to him - whether we thought it was really important or not, we say, “well if it is really that important to you, you can save up for it.” 

Earning independence
Liam’s money comes from three sources: holiday gifts, household chores and odd jobs, including shovelling driveways and mowing lawns. Seeing his savings grow and realizing what he can do with it has encouraged him to keep earning.

“He’s fairly entrepreneurial in that he’s started to ask about mowing our neighbour’s lawns,” Bill said. 

Liam’s parents not only educate their son on financial literacy, but are quick to honour their payments for chores completed. Almost as quick as Liam is to generate an invoice, (another skill the young entrepreneur has learned).

“Liam is learning about receivables and that until you receive the actual money, you don’t have the money yet,” Bill said. “Liam has a Meridian account and it’s very handy, because we can pay him through a Meridian account-to-account transfer for free. So that’s made it easier for us to make good on our debts as parents.” 

The Lesson Plan
Since Bill uses an Excel spreadsheet to manage the business and household funds, he set up a similar platform for Liam. It lays out the balance, the percentage for church and savings, the cost of each item he is saving for and even calculates the sales tax, so Liam understands the final cost versus the advertised price.

“It is helpful because it sorts stuff,” Liam said. 

But it’s more than that, Bill explains. The spreadsheet is a reference tool. 

“It helps give us an answer every time he says, “Can I get this?” I can say, well, you can get it, but you have to go back to the spreadsheet and see what your priorities are and what your total saving is now.” 

Price comparison is another lesson Liam is learning young. With supervision, he does product research online through retailers that his parents allow, such as Amazon or Toys R Us.   

“It’s a whole new skill for this generation to search and do a price comparison, and get the same product for less money,” Bill said. 

Making the grade
Bill believes these lessons have given Liam more independence, not only in his desire to earn money to get the things he wants, but also to do good through his church and to make informed decisions on how he spends his own money. 

With his immediate purchase goals close at hand, Liam admits he has already determined his long-term savings goal: a larger Star Wars Lego set, (because you can never have too much Lego).

Well done, Liam. We give you an A+ for being on the right path to financial literacy. 

We are proud to serve young members and keen savers like you. 

For more information on Meridian Youth Accounts, visit our website or contact your local branch