A wobbling baby tooth is a sign that the Tooth Fairy will soon be visiting. It’s also a sign for parents that it’s time to help guide your kids through their important, first-time money activities.
Baby teeth earnings are more lucrative than you might think: In 2015, according to Visa Canada, young Canadians could expect an average of $3.44 for a lost tooth – a 23 per cent increase over the 2014 average of $2.80 per tooth. That’s almost $70 for a full set of first teeth.
And, depending on where they live in Canada, some youngsters can expect even more. In Québec, for example, the average Tooth Fairy payout is $4 while about five per cent of lucky young Canucks will find $20 per tooth under their pillow.
Here’s how you and the Tooth Fairy can help teach your young ones some basic lessons about money.
Teach kids about handling coins and currency: At some point, your child will want to save, spend or invest. Start them off on the right track by having them touch and feel some coins and identify their value. Show them how money adds up – how two nickels equal a dime and five nickels equal a quarter. Get them a piggy bank and talk to them about the importance of saving for the things they want and for emergencies.
Help your kids with first purchases: Use the Tooth Fairy money to teach them the value of balancing wants and needs. Have them set aside money for savings and when their savings goal has been reached, reward them with a trip to the store for a small purchase. Show them how to shop for the best price and let your child complete the transaction on their own.
Make the connection between kids and cash: The Tooth Fairy likely isn’t the only source of cash for your kids – cash is often a popular birthday or holiday gift – so use each “gift” to reinforce the value of saving and spending wisely.
Introduce the concept of budgeting: As your kids get older, have them allocate their spending in line with their need to save according to a basic budget.
Bank on it: Show them how adults handle money by regularly taking them to the bank and, when it’s time, have them open their own savings account.
A visit from the Tooth Fairy is an ideal opening to teach your kids important money lessons. It can also serve as a reminder to you that it’s time to talk to your professional advisor about your own financial life.
Jeff Somers, BA, RRC, CFP works at Investors Group in Charlottetown. This column, written and published by Investors Group Financial Services Inc. and Investors Group Securities Inc. presents general information only and is not a solicitation to buy or sell any investments. Contact your own adviser for specific advice about your circumstances.
