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2 Ways To Ensure Your Kid Makes Good Financial Decisions—By A Psychologist

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2 years ago

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2 Ways To Ensure Your Kid Makes Good Financial Decisions—By A Psychologist

In an age where Instagram posts flaunt the latest luxury fashion trends, TikTok videos showcase lavish vacations and influencers endorse expensive gadgets, children are bombarded with a relentless stream of materialistic messaging. This is often coupled with thousands of “finance bros” on every corner of the internet promoting their latest “get rich quick” scheme.

Consequently, social media has bred a culture of instant gratification and conspicuous consumption, making it more important than ever for parents to teach their children how to build a healthy relationship with money.

Financial literacy and budgeting are life skills that significantly impact an individual’s psychological well-being and overall quality of life. Teaching children about money management from an early age can contribute positively to their psychological development and financial success as adults.

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Here are two reasons why financial literacy can set your child up for success

1. Financial Literacy Builds Character

Teaching children to save for desired items helps develop the ability to delay gratification. They learn that their patience will be rewarded by gradually achieving financial goals rather than by impulse buying. This process helps them understand that immediate desires can be managed and investing in long-term goals is deeply beneficial.

Research shows that delaying gratification can positively influence financial decisions and curb risk-taking behavior, encouraging individuals to exercise restraint and avoid debt.

Additionally, as children learn to save for things they want, they may develop a sense of self-confidence in their decision-making abilities. This can translate to other areas of their lives, such as academics and personal goal-setting, boosting their self-image and overall psychological well-being.

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2. Financial Literacy Shapes Financial Well-Being

Skills like budgeting foster a sense of responsibility. When kids learn to create and adhere to a budget, they gain insight into making informed decisions about their spending. This process instills accountability as they ensure that their expenditures align with their financial plans.

According to a 2021 study published in Financial Counseling and Planning, spending habits and attitudes around money management formed in childhood also significantly impact adult financial behavior. In other words, the earlier you start discussing budgeting in your home, the higher your child’s chance of becoming a financially responsible adult.

Here are three techniques to equip kids with the knowledge and skills to confidently navigate their financial futures:

  • Model responsible behavior. Children often learn by observing the adults around them. By consistently demonstrating healthy financial habits—such as budgeting, saving and thoughtful spending—adults can set a strong example for children to emulate.
  • Normalize financial literacy in everyday life. Consistency is key in helping children understand and internalize financial principles. Tailor these concepts to their developmental stage, gradually introducing more complex ideas as they grow. Regularly incorporate discussions about money into everyday life, whether through grocery shopping, budgeting for family outings or discussing the value of work.
  • Provide opportunities for experiential learning. Hands-on experience is crucial for reinforcing financial lessons. Providing children with real-life scenarios—such as managing a small allowance, saving for a specific item or participating in family budgeting decisions—allows them to practice financial skills in a safe environment.

Children develop a sense of responsibility, independence, critical thinking and problem-solving skills as they learn to manage their resources wisely, weigh options, anticipate consequences and make informed decisions about their finances. This can reduce financial stress as an adult, contribute to better financial decision-making and create a stronger sense of financial security throughout their lives.

Do you think your spending habits could be affecting your child’s financial mindset? Take this test to learn more: Excessive Buying Scale

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Finance

Ontario must prepare for ‘tougher times’ ahead, finance minister says before budget

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9 hours ago

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March 25, 2026

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Ontario must prepare for ‘tougher times’ ahead, finance minister says before budget

TORONTO — Ontario should be prepared for “tougher times” amid global economic disruption, but the government won’t slash public sector jobs to buttress the budget amid uncertainty, the finance minister is signalling ahead of Thursday’s fiscal update.

Other provinces have recently braced against the economic headwinds by forecasting record deficits, raising taxes and cutting front-line jobs, but that will not be Ontario’s approach, Peter Bethlenfalvy says.

“The world has changed — and Ontario must be ready for what change may bring, even if that means being prepared for tougher times,” he said in a pre-budget speech earlier this month.

“As a government, we cannot eliminate uncertainty, but we can mitigate risks with a responsible, balanced fiscal approach that supports public services and infrastructure while maintaining flexibility.”

In that speech, he twice mentioned delivering government programs “efficiently and sustainably,” words that are sometimes used by politicians to signal belt tightening.

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“I think it reflects the fact that we’ve got to make sure that the money, the significant investments we’re making in social services, health care, education, gets to the workers who are providing, whether it’s a social worker or a health-care worker or a teacher, and making sure all the money just doesn’t flow to administration,” he said Wednesday in an interview.

Ontario has already tasked hospitals with coming up with a three-year plan to balance their budgets, in a bid to get a handle on growing deficits in the sector, using an assumption of getting two per cent annual funding increases. That is half of the increase they received the previous year.

Some hospitals have already started making some “lower risk” cuts under that plan, the Ontario Hospital Association has said. The province would need to add about $2.7 billion to meet the full operating needs of the hospital sector, the association has said.

The province’s deficit, in the most recent fiscal update earlier this year, stood at $13.4 billion. Bethlenfalvy has been silent on whether the path to balance remains the same as his plan in last year’s budget to get into the black in 2027-28.

Balance, however, has been a moving target. The 2027-28 goal is a year later than Bethlenfalvy projected in the 2024 budget, which itself was a year later than he projected in the 2023 budget.

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Ontario’s books are in a relatively good position to be able to stay on the province’s path to balance and lower the net-debt-to-GDP ratio, as long as it doesn’t use fiscal breathing room to announce new spending commitments, according to a budget preview from Desjardins.

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Finance

UK inflation held at 3% ahead of Iran war

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21 hours ago

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March 25, 2026

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UK inflation held at 3% ahead of Iran war

UK inflation held at 3% in the year to February, before the start of the conflict in the Middle East, which has sent energy costs soaring and led to concerns of a resurgence in pricing pressures.

The latest consumer price index (CPI) reading from the Office for National Statistics (ONS), released on Wednesday, was in line with consensus expectations. This came after inflation fell to 3% in January from 3.4% in December.

The ONS said that clothing made the largest upward contribution to the monthly change in inflation in February, while motor fuels was the biggest downward contributor.

Read more: Multiple Bank of England interest rate rises expected after energy price surge

The data covered the period before the start of the conflict between the US, Israel and Iran on 28 February. The conflict has disrupted oil (BZ=F, CL=F) and gas (NG=F) supply, sending prices soaring, with concerns that a prolonged energy price shock could push inflation back up.

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Grant Fitzner, chief economist at the ONS, said: “The largest upwards driver was the price of clothing, which rose this month but fell a year ago.”

“This was offset by falls in petrol costs, with prices collected before the start of the conflict in the Middle East and subsequent rise in crude oil prices.”

The Bank of England (BoE) warned last week that inflation will be higher in the “near term” due to the shock from higher energy prices, as it announced it had kept interest rates on hold at 3.75%.

Commenting on February’s inflation figures, chancellor Rachel Reeves said: “In an uncertain world we have the right economic plan, taking a responsive and responsible approach to supporting working people in the national interest.”

“We’re taking £150 off energy bills and providing targeted support for those facing higher heating oil costs. We’re also acting to protect people from unfair price rises if they occur, bring down food prices at the till, and cut red tape to boost long-term energy security — building a stronger, more secure economy.”

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Ruth Gregory, deputy chief UK economist at Capital Economics, said: “The economy entered the energy price shock caused by the conflict in the Middle East with CPI inflation stuck at 3.0%.”

“And based on our current working assumptions about oil and gas prices, we now think CPI inflation could rise to a peak of about 4.6% in Q4.”

“With the energy price shock likely to extinguish growth and add to the already elevated unemployment rate, in our baseline scenario we still think an extended interest rate pause is more likely than interest rate hikes,” she said.

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Finance

Digitized Assets & Tokenized Finance Impact Report 2026 FII Institute Site

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1 day ago

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March 24, 2026

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Digitized Assets & Tokenized Finance Impact Report 2026 FII Institute Site

What if the global financial system could move at the speed of the internet unlocking trillions in value while expanding access to capital worldwide?

Developed in collaboration with Dante Disparte, Chief Strategy Officer and Head of Global Policy & Operations at Circle; Fred Thiel, Chairman and Chief Executive Officer of MARA, Inc.; and Ryan Hayward, Head of Digital Assets and Strategic Investments at Barclays, this report on digital assets and tokenized finance reveals how a rapidly emerging $16–30 trillion market is transforming traditional finance into a real-time, programmable, and borderless ecosystem.

It explores how the tokenization of real-world assets, the explosive growth of stablecoins processing over $30 trillion annually, and instant (T+0) settlement are redefining liquidity, reducing cross-border costs, and reshaping global investment flows. The report also highlights the critical role of financial inclusion, addressing a $330 billion SME financing gap alongside the rise of AI-driven transactions, energy-powered infrastructure, and evolving regulation that will ultimately determine who leads and who benefits in the next era of finance.

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