Teach Kids Money Skills Using Their First Phone

The conversation around smartphone use among children and teenagers is shifting. In recent years there has been a stronger push to limit screen time for tweens and teens. In 2024, several school boards in some provinces moved to ban cellphones in classrooms, and there have been increasing calls in Canada to consider policies similar to Australia’s proposal to restrict social media use for those under 16.

Still, many parents eventually decide to give their child a first smartphone. Experts say that when that happens, it’s important for parents to establish clear boundaries and safeguards on the device. Modern phones and apps are often designed to make spending easy—and sometimes invisible—so proactive measures are essential.

Turn a first cellphone into a money lesson

“Giving your child their first cellphone can be a really great teachable moment—an opportunity to build a money lesson naturally into your day-to-day lives,” says Robin Taub, author of the book The Wisest Investment: Teaching Your Kids to be Responsible, Independent and Money-Smart for Life.

The first step is a frank conversation about the real costs of owning a phone and which expenses the parent will cover versus what the child will be responsible for. Obvious items include the device itself, a monthly plan, a protective case and, if chosen, a phone protection or insurance plan. But it’s also useful to explain how billing works, what can cause unexpected charges, and how to spot and avoid them.

For younger teens—around 13 or 14—start with practical lessons like how data overages occur, how to connect to trusted Wi‑Fi networks safely, and the importance of switching off data roaming while travelling to avoid steep charges. As teenagers get older, parents can gradually transfer financial responsibility for a phone plan to them or set up shared arrangements where teens contribute to part of the bill.

When phone costs go beyond the bill

Beyond the monthly plan, many costs are less visible: in-app purchases, subscriptions, trial sign-ups that roll into paid plans, and small digital purchases that quickly add up on a credit card. These can surprise parents who aren’t monitoring activity closely.

Rebecca Snow, co‑founder of the Toronto chapter of Unplugged Canada, remembers discovering that her children were asking for in-game currency for a popular online building game. “They used to ask me, ‘Can we get Robux?’” she recalls. “They didn’t realize that meant I was actually spending money to buy little digital tokens for outfits and accessories for their avatars.”

Certified financial planner Kalee Boisvert encounters similar situations with her own family. Her 11‑year-old has a smartphone without a mobile plan, and when she asks for in-app purchases, Boisvert turns it into a conversation about priorities. “It’s about reviewing what matters,” she explains. For example, Boisvert reminds her daughter about an upcoming trip to Disneyland and how saving for that experience might be a better use of money than small digital purchases now.

Build financial literacy before digital independence

Snow emphasizes the importance of teaching financial skills before handing over a smartphone. Her 12‑year‑old son, who does not yet have his own smartphone, uses a pocket money app called Mydoh on a computer or on Snow’s phone to learn about saving and earning through chores. These early habits help children understand trade‑offs and set the stage for responsible digital spending later.

“I can say, ‘If you take your lunch box out of your bag every day, press this button on Mydoh and you’ll get $2 a week for doing that,’” Snow says. That kind of concrete reward system teaches how small actions can build savings and prepares kids for managing money when they have their own device.

Margot Denomme, founder of Raising Awareness About Digital Dangers, compares giving a smartphone to giving car keys. “It’s like our kids taking the car out right after they get their driver’s licence,” she says. “We don’t just hand over the keys and not ask where they’re going.”

Denomme recommends practical safeguards before handing over a phone: disable in‑app purchases, require parental approval for any purchases, and set up parental controls that limit spending and access. After setup, she advises parents to check in regularly—weekly, or even daily at first—and ask children what they are doing online. Regular conversations help parents spot concerning trends and teach children to recognize red flags.

“Get involved with your children’s online lives so you understand what they see and do, and can point out warning signs,” Denomme says. She adds that many parents are overly protective of their child’s privacy when it comes to the device. “It’s your phone—you purchased it—and it’s reasonable to set conditions and safeguards that protect both your child and your finances.”

Read more about saving:

• How to find room to save in 2026—even with tight budgets
• How automation can simplify your finances
• If not bonds, then what?
• How often should you check in on your finances?