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beyond the piggy bank

What would you rather do: Teach your son about the importance of wearing a condom or coach him on how to budget his hard-earned dough?

In the bevy of tough chats parents have with their children, the sex one is definitely a doozy. But discussing the ins and outs of money and personal finance turns out to be one of the most cringe-worthy parenting topics, a new survey suggests.

The Angus Reid Strategies poll of 624 Canadian parents reveals that over all, moms and dads feel better prepared to discuss sex, drugs and alcohol than to broach the topic of finances - a finding that shines a light on the real state of adult financial literacy, experts say.

"I think parents just feel very uncomfortable with the material," says Peter Aceto, president and chief executive officer of ING Direct, which commissioned the survey. "I think they lack confidence in whether they even understand finances well enough for themselves, let alone to teach it to their children."

The findings show the country's squeamishness about financial conversations, says Steve Garmaise, associate director with Foundation for the Advancement of Investor Rights.

"Most Canadians and most parents are fairly ignorant about financial matters … and would rather hand it off to someone else," he says.

In a lot of ways, the sex talk is a simpler, quicker and more expected conversation to have with the kids, says Tom Hamza, president of the Investor Education Fund, which is financed by the Ontario Securities Commission.

Parents obviously have knowledge in that area, whereas talking about money can open them up to scrutiny. It can also be embarrassing, especially for those who dread tearing open the bills at the end of the month, Mr. Hamza adds.

"I bet a lot of people look back at their mistakes and smirk at them, on the sex side. On the financial side, they probably look at their decisions and they shudder, particularly if they started saving for retirement really late or they're in debt or they have some looming financial issue or risk."

Money talks also take time - something all parents are in want of these days. A birds-and-the-bees chat can be done in a "two-minute, yet stunningly awkward" conversation, Mr. Hamza says, while financial management discussions can take numerous sit-down sessions or the ability to turn regular monetary events into learning opportunities.

And still another reason many parents bristle is because their own parents didn't discuss dough with them, says Joline Godfrey, the founder and CEO of Independent Means, a U.S.-based organization that teaches financial literacy to kids and parents.

"The boomer generation … grew up with good tennis lessons, good music lessons, but not very good financial coaching," she says. "I think now that parents really want their own kids to be more thoughtful about it, it's hard to know where to begin on such a big subject."

Adding to the frustration of limited know-how is the pressure to keep kids up to date with all the fancy stuff their peers have, says Gary Rabbior, president of the Canadian Foundation for Economic Education. Money talks also require using the word "no."

"Whenever you make a decision about money, you're learning about giving up…," he says. "There's a hesitation at times [on the part of parents]to take advantage of the learning opportunities because they don't want to go into the denial process."

But in the face of that hesitance, children do depend on their parents for guidance. A study released by the Investor Education Fund in June found that 90 per cent of kids look to their parents for financial advice. Eighty per cent of students consider their parents their most trusted source for information on finances.

Jennifer Robson, a 33-year-old policy researcher in Ottawa, is trying to give her daughters an early primer on the way money works, but says it's tough to explain in a way that Morgan, 7, and Isobel, 5, can understand.

Telling them why it's important to put money in the bank versus keeping it in their piggy banks - to earn interest - was a hurdle, she says.

"They wanted to know for sure that they could get their money back. Because, you know, with the piggy bank, you can go and check that the money is still there."

Having money discussions has paid off in Barbara Gosse's household in East Toronto.

Last weekend, Ms. Gosse, 47, asked each of her sons, Ethan, 16, Liam, 12, and Callum, 10, what they felt most comfortable discussing with her and their father.

They all said money, and Ethan told her why.

"He said, 'Mom, it's easy. We have people at school talking to us about sex and about drugs; we don't have anyone talking to us about money,'" she says. "He was very clear to me that he doesn't have supports anywhere else."

It wasn't always this way.

A few years ago, Ethan, then 13 and clearly nervous, said he wanted to talk with his parents. Bracing for a sex query, Ms. Gosse was surprised and relieved when he asked his parents to "finance" an iPod.

"He actually used the word 'finance,'" she says. "And that's what really freaked me out."

Walking the talk

If the idea of a money talk with your kid drives you to panic, take a deep breath and a few tips from Brent Dobson, president of Moonjar Canada, an Ottawa-based company that helps parents teach financial literacy to their kids.

Start early. Kids usually start asking parents about purchases by age 4 or 5. Starting them with a small allowance will also let parents say 'no' a little less often and help kids make purchasing decisions.

Discuss the difference between wants and needs. Help them determine that when they want to make a purchase.

Let them make money mistakes. If your son's scooter breaks because he wouldn't save to buy one of higher quality, then he'll know better the next time.

Use everyday examples as learning opportunities. Let them look over your shoulder while you pay a bill, or tell them why you're waiting to buy a big-screen TV instead of putting it on your credit card.

Be a good role model. If you're telling them not to buy frivolous items, you'd better not be shelling out for deluxe lattes every day, or impulsively buying a fancy power tool at the hardware store.

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