Here’s how you can give your kid a solid financial foundation….
The earlier, the better...
It's never too early to start teaching your kids about money. Children can learn a lot about money and how to save coins in a piggy bank before they understand how to count the right change.
Even very young children, can learn the worth of money and saving for small goals.
For example by showing them how much R4 or R7 can buy in the supermarket. You can talk to them about the difference between the things they need and the things they want.
These fundamental financial skills will serve them well through life, especially when you’re no longer around.
Pay pocket money for doing jobs around the house
A small allowance is a great way to educate children that money has to be earned; it doesn't magically spring from ATMs.
Set tasks for your children, like helping with the washing up, gardening or putting the rubbish bins out.
Reward them with a small amount like R1.50 for each job they do and nothing more. Draw up a job schedule to let your kids tick off the tasks they’ve completed.
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Show your children how to budget.
Learning to budget is an important skill. Teach your kids how to budget by:
Give them a small mixture of notes and coins in their pocket money. This teaches them how to deal with different sums of money, and they can immediately set aside a few coins or notes for saving.
Showing them how to read things like household bills and bank statements isn’t a bad thing too, simple ones though.
Give them fixed amounts of spending money for family holidays and show them how much they can afford to spend each day to avoid running out of money before the holiday ends.
How to inspire your kids to save
Find out what your children want to buy. Then help them think about ways they could earn pocket money and save for the item: toys and games if they are young; or books, movies or a special event if they are older.
Discuss how much they will need to set aside from their pocket money or their pay each week to reach their target. Encourage your children to stay on track by offering to add to their savings if they achieve a particular savings goal.
If your child's first savings experience is good, they will be more likely to repeat it!
Saving for a rainy day…
Encourage children to put loose change in a clear 'savings jar' each day so they can see it grow or use the cash to pay for small items like school lunches.
You should even consider saving as a family for something fun like a visit to the zoo or a holiday, this is a good opportunity for you as a parent to show good money management.
It's also a way to naturally introduce finance topics around the dinner table.
How to help older kids get a part-time job
Older kids like teenagers can really benefit from having a casual job now and then. It provides treasured experience in finding and
applying for a job in the future, and prepares them for the responsibilities involved with work.
Get your child to draw up a simple spending budget for their income, allocating part of the money to spending and part of it to saving.
A great lesson they can learn, is that running out of money before pay day is the consequence of not sticking to a budget.
Encourage them to set specific and realistic long-term goals and to save some of their pay each week towards their goals.
Teaching your kids how to handle money from an early age provides valuable abilities for budgeting and saving, and instils practical money habits that’ll stay with them for life.