For many young Canadians, personal finance can feel like being stuck in a maze without a map. Whether it’s understanding credit cards, managing student loans, or setting up a savings plan, taking control of your money early is one of the best decisions you can make.
Harris & Partners specializes in helping people overcome financial struggles, so we know better than anyone how easily it is to fall into debt. We also know how much of that stress could have been avoided with the right habits and knowledge early on.
But here’s the thing: schools don’t teach nearly enough about money management. That leaves young adults learning through trial and error—and for parents, it creates the question: How do I prepare my kids to handle finances without overwhelming them?
This guide is for both young adults looking for advice and the parents who want to offer guidance at the right time.
Key Points:
- Building a solid foundation for young adults
- How to teach your kids about money
- Building financial habits together
For young adults: building a solid foundation
Starting your financial journey might be intimidating, but the good news is that small, consistent steps make all the difference.
1. Start with a budget
The first step in managing your finances is knowing where your money is going. A budget helps you track your income and expenses, showing you what’s left over for savings or fun. The 50/30/20 rule is a great place to start:
- 50% for necessities (like rent, groceries, transportation).
- 30% for optional spending (like entertainment and eating out).
- 20% for savings or paying down debt.
Budgeting tools like Mint or YNAB can help simplify this process. These apps connect to Canadian bank accounts and make tracking your spending easy.
2. Build an emergency fund
Life is full of unexpected expenses—car repairs, job loss, or medical bills. That’s why an emergency fund is so important. Even saving $500 to $1,000 can provide a financial cushion and prevent you from relying on credit cards or loans.
Once you’ve hit that first milestone, aim for 3–6 months’ worth of living expenses. A high-interest savings account from a Canadian bank like Tangerine or EQ Bank is a great place to store this money.
3. Be careful with those credit cards
Credit cards can help build your credit score, but they can also create big problems if not used wisely. Here’s how to stay on track:
- Pay off your balance in full every month to avoid high-interest charges.
- Use your card for planned expenses—don’t swipe for impulse buys.
- Try to use less than 30% of your credit card limit to keep your credit healthy.
Credit card debt can snowball fast, and we’ve seen firsthand how challenging it can be to dig out. Treat credit cards as tools, not extra income.
4. Focus on goals: What are you saving for?
Financial goals make it easier to stay motivated. Start small with short-term goals, like saving for a trip or paying down part of your student loans. Then think bigger—long-term goals like buying a home, starting a family, or achieving financial independence.
Break these goals into actionable steps. For example, saving $1,200 for a new laptop over 12 months means setting aside $100 each month. Seeing progress will keep you inspired.
5. Avoid lifestyle: Live within your means
As you earn more money, it’s tempting to spend more. While there’s nothing wrong with treating yourself, try to avoid lifestyle inflation, where your expenses rise as quickly as your income.
Instead, prioritize savings and paying off debt. For example, if you get a raise, consider increasing your contributions to a Tax-Free Savings Account (TFSA) or using that extra money to build your emergency fund.
For parents: how to teach your kids about money
Parents, you play a vital role in helping your kids build good financial habits. The earlier you start, the better prepared they’ll be in adulthood. Here are some ways to guide your children—whether they’re teenagers or young adults.
1. Start the conversation early
It’s never too early to talk about money. With younger teens, focus on simple concepts like saving, spending wisely, and understanding that money is finite. For example, give them a set allowance and encourage them to budget for their wants and needs.
As they get older, introduce more complex topics like how credit cards work, the importance of paying bills on time, and the basics of saving for big expenses. Use real-life examples to make these lessons relatable.
2. Lead by example
Kids often mirror their parents’ habits, so showing responsible financial behavior is one of the best ways to teach. Share how you manage your own money—whether it’s how you budget, save for vacations, or pay off debts.
Being transparent about your successes and mistakes can also be powerful. If you’ve struggled with debt in the past, explain what you learned and how they can avoid similar pitfalls.
3. Teach the value of an emergency fund
Help your kids understand that emergencies are inevitable and having a financial cushion can prevent stress. Start by encouraging them to set aside small amounts, even if it’s just $20 a month.
You can also help them open their first high-interest savings account and explain how this money should only be used for true emergencies.
4. Use real-life milestones as teaching moments
Big life events—like getting their first job, applying for a student loan, or buying a car—are great opportunities to discuss finances. For example:
- When they get a job: Talk about the importance of setting up automatic savings.
- When they apply for a loan or credit card: Explain the long-term impact of interest and how to manage debt responsibly.
These moments are when financial lessons will stick the most.
5. Encourage professional advice
If your child is facing more complex financial challenges—like crushing student debt or managing multiple credit cards—suggest meeting with a financial advisor or even one of our debt relief professionals at Harris & Partners. Professional advice can make all the difference when you’re struggling.
Building financial habits together
For young adults, taking control of your money now can set you up for a lifetime of success. And for parents, the guidance you provide can make all the difference in helping your kids avoid financial stress.
At Harris & Partners, we’ve seen how devastating debt can be, but we’ve also seen how the right habits and support can turn things around. Whether you’re a young Canadian starting your financial journey or a parent hoping to prepare your child for the future, the same principles apply:
- Start with small, manageable steps.
- Focus on building a strong foundation.
- Don’t be afraid to ask for help when needed.
With these tools and a little patience, financial stability—and even financial freedom—is within reach. Remember, you don’t have to do it alone. If you’re ever unsure about the next step, our team is here to help.
