Children actively acquire skills and information as they interact with various settings starting at birth.
The social skills they acquire at home and the hygiene lessons they receive at school all play a role in their development, but only one lifelong skill – the ability to manage money – will help our children go through both good and bad times.
While certain schools may contribute to the teaching of financial literacy, ultimately, it is your supervision that is required to assist them in finding their wings.
The early financial education and mentoring we give our children will help them develop sustainable livelihoods in the years to come, especially given the baseline levels of poverty and unemployment in South Africa.
Imane Charioui, Director of Francophone Africa, WorldRemit, has a few tips to help parents teach their kids how to be money savvy.
Let’s talk money
“It’s common for parents to avoid discussing money matters with their kids in front of them, but it’s important to start the conversation early to foster a child who will be financially stable as an adult. Of course, this should be done without bringing up any actual financial concerns”, says Charioui.
So think about having regular conversations with the kids about everyday expenses like paying for food, paying for education, transportation, and vacations.
Teach them how to budget
Charioui asserts: “It’s important to start teaching your kids about budgeting early, whether they get gifts and pocket money from their favourite uncle or work an after-school job to earn their own money. And have fun with it!”.
Younger kids can learn to separate their money into three different piggy banks or jars: one for spending, one for sharing or giving gifts, and one for saving. Your kids will start to take greater ownership of their financial management as a result of budgeting.
Start them saving early
It’s crucial to instil in your kids the idea that they don’t have to spend all the money they earn or receive at once, regardless of how large it may be. Setting objectives and putting money down for the future is much better!
“So, assist them in opening a savings account. It could be advisable to use a digital savings account. After all, most banking will be done online by our children in the future. The earlier you introduce kids to using a computer, tablet, or smartphone to manage their finances, the better”, says Charioui.
“It’s crucial to instil in your kids the idea that they don’t have to spend all of the money they earn or receive at once, regardless of how large it may be. Setting objectives and putting money down for the future is much better!” she adds.
You may explain how the account develops as a result of deposits and interest once they have a savings account by having a look at the monthly statements with them. Encourage your older kids to save aside bigger amounts of money for an item they truly want, such a new computer or bike.
Your kids will learn the value of self-control and goal-setting by saving.
Encourage them to work for the things they want
“Instead of immediately going for your credit card when your child has their heart set on anything, from a book to a bike, encourage them to work for the money. Nobody wants their children’s school work or play to be hampered by work, but there are modest jobs they can take on to make a little money and buy the items they desire”, says Charioui.
Little ones can add money to their piggy banks by helping out around the house. Teens are able to garden and watch children. Additionally, older kids can find part-time jobs in stores, eateries, and even seasonal employment in neighbourhood cafés.
“The advantage of that? To instil in children the responsibility and pride of earning and saving their own money from a young age. They will be able to fully comprehend and develop an appreciation for the worth of money in this way”, says Charioui.
Spending, not overspending
The truly enjoyable part will now begin. Your child can go shopping and stick to a budget after having saved the appropriate amount. Naturally, tell them not to overspend. But it’s ideal to let kids make the purchases as long as they’re old enough. When it comes to financial matters, they really need to be in charge.
You can teach children some important lessons about how individual decision affects money management if you assist them in becoming wise spenders.
