How to turn your child’s first phone into a money lesson

The narrative about smartphone use among teenagers is changing. There’s been a growing push in the past few years to keep phone screens away from tweens and teens. Several school boards banned cellphones in classrooms in some provinces in 2024, while calls to follow Australia’s steps in banning social media for those under the age of 16 have grown in Canada. 

Still, many parents can only hold off for so long on giving their child their first smartphone. And when you do, experts say the onus is on parents to set up the right guardrails on the device, especially as most phones are designed to make spending easier, and sometimes, invisible.

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,” said Robin Taub, author of the book The Wisest Investment: Teaching Your Kids to be Responsible, Independent and Money-Smart for Life.

The first step, she said, is to sit them down and go over various costs associated with phone ownership, and lay out who’s responsible for them. There are some obvious costs—the phone itself, a phone plan, a case, and sometimes a phone protection plan.

Taub said if a child is on the younger side—around 13 or 14 years old—you can start by teaching them about data overages, connecting to wireless networks, and turning off data roaming when travelling to avoid a hefty bill. With older teenagers, she said parents can gradually shift the responsibility of paying the phone bill onto them.

When phone costs go beyond the bill

But there are many more less visible costs, such as in-app purchases or sign-ups for trials that can sneakily be added to a credit card.

Rebecca Snow recalled her kids playing a popular online world-building game, Roblox, which often requires in-app purchases for new avatars or outfits for the characters. “They used to ask me, ‘Can we get Robux?’” said Snow, co-founder of the Toronto chapter of Unplugged Canada, a group that advocates for smartphone-free childhoods. “They didn’t realize that that’s me actually spending money on Robux, buying these little digital tokens to get little outfits for their avatars.” 

Certified financial planner Kalee Boisvert is also familiar with requests for game token purchases. When Boisvert’s 11-year-old daughter—who has a smartphone without a cellphone plan—asks for in-app purchases, it starts up a conversation. “It’s just that priorities conversation and reviewing with them what matters,” she said. For example, Boisvert reminded her daughter of an upcoming trip to Disneyland and how it could be better to save for something she may want to buy there.

Build financial literacy before digital independence

Snow said there’s a strong need for financial literacy before kids get their first smartphones. She said her 12-year-old son, who doesn’t yet have a smartphone, uses a pocket money app called Mydoh on the computer or Snow’s phone to understand the concept of savings and earnings through chores around the house. 

“I can say, ‘Okay, if you take your lunch box out of your bag every day, click this button on Mydoh and you’ll get $2 a week for doing that,’” Snow said. She said these healthy online financial habits will come in handy when he eventually gets his first smartphone. 

Margot Denomme likens giving smartphones to tweens and teens to driving. “It’s like our kids taking the car out right after they get their driver’s licence,” said Denomme, founder of an advocacy group Raising Awareness About Digital Dangers. “We don’t just give them the keys and not ask where they’re going.”

Before handing over their phone, Denomme said parents should disable in-app purchases and turn on parental approval for every purchase. Even after setting up their phones for use, she suggested checking in with kids weekly, or even daily at first and asking about what kinds of activities they’re engaging in online.

“I encourage parents to get involved with their children online so they’re understanding and they’re helping them point out red flags,” she said. Denomme said parents often take their kids’ privacy too seriously. “No—it’s your phone. You’ve purchased the phone and it’s OK to put these provisions in place,” she said.

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?

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