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You may think that children don’t understand the intricacies that come with managing the household budget, but they understand more than you think. What’s more the way in which you treat, manage and view money is something that your children will copy by observing what you do.
Nelisiwe Mbara, certified financial planner at Alex Forbes, says: ‘Your own attitude about money helps to shape how your children think about it. Teaching positive money behaviour from a young age helps to create a lifelong awareness of money-savvy attitudes and behaviour.
It is not necessary for children to be earning their own money before they are taught money management. Rather, it can start as soon as they are old enough to understand that people use money to buy items they need and want.
Here Estate Living imparts with some sage advice when teaching children about the value of money:
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1. Help them understand
It’s important to convey to children how money is earned and explain how it can be managed to last till the next pay cheque.
Mbara says: ‘Let your child see you planning your budget, paying bills, shopping carefully, and planning holidays. Explain why you are making your choices. This should kick-start a lifelong lesson to inspire them that they need to work to earn the money they spend and save.
2. Model good behaviour
This means teaching them that buying things on impulse is not a good idea. Mbara advises: ‘Say ‘no’ to impulse buying requests and teach your child how to compare pricing.’
3. Donate to charity
There are benefits to giving to charity. According to studies donating to charity can be a major mood booster. Not only is donating rewarding it’s empowering too.
But this should not be the only reason why you should teach your children about giving. It helps to promote generosity in your children and teaches them that not everyone is privileged enough to earn pocket money.
Teach your kids to donate money to a registered PBO (public benefit organisation) which has been approved by the South African Revenue Service (SARS).
4. Get them to do chores
If children earn an allowance through doing some work, they will get an idea of how the real world works. Mbara says: ‘You can show them how they can earn extra income by doing jobs like cleaning the house, helping in the garden, or washing the dishes. An older child can also set up a small business, selling fudge to their friends, for example.’
5. Show them how to save
Typically, children see parents spending money, but few are guided on how to save it. Mbara explains: ‘Saving involves setting saving goals and planning; this will teach children goal setting and discipline. They will learn about delaying gratification and opportunity costs.’
Their own bank account
There are plenty of benefits to teaching your children how to save. If you find they’re able to manage their piggy bank savings (or if they tend to lose their coins) open a bank account for them instead.
Most of the major banks in South Africa offer a kid’s bank account with no monthly fees. Teach them how to get the most out of their bank account and how to avoid fees by transacting within the free benefits that they get and doing as much as possible digitally.
