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Financially Fit Kids



Children learn a lot at school but one of the most important things they have to learn in life – how to manage money – is missing from the school curriculum and should be taught by parents from a very young age.

In an age where we pay accounts online, and make purchases at the supermarket with a piece of plastic, children don’t get to understand the value of money.

While some South African schools may have programmes in place to teach learners some degree of financial literacy, the onus is really on parents to teach their children about managing their finances, budgeting and saving.

In an age where we pay accounts online, and make purchases at the supermarket with a piece of plastic, children don’t get to understand the value of money. Children need to learn that even though they can’t always see it, money is real and it doesn’t grow on trees, or out in cyberspace for that matter.

Learning about money and how to manage it needs to start at an early age.

While this may sound extreme, allowing your toddler to hand over the money to the cashier at the supermarket illustrates that money is swapped in exchange for something that is needed and, that in purchasing that item, the amount of money they have left will be less.

The best way for parents to ensure that their children are financially competent is to teach by example. This is because children learn a lot about the world through the behaviour of their parents. If parents are prudent about how they spend their money, it is more likely that their children will be too.

The role of mothers in this cannot be underestimated because they are generally in charge of the household budget and, children, albeit unwillingly, are often dragged along with them to do the grocery shopping, run errands and pay accounts.

Mothers must realise that these seemingly tedious tasks are actually prime opportunities for learning for their children, adds Farrell.

Here are some tips for mothers who want to instil good financial habits in their children.

  • Introduce young children to the concept of saving by buying them a “piggy” bank and allow them to put coins in it. Every week, tip out and count the money so that they can see how the number of coins grows as they save.
  • Encourage your child to save for something special over a period of about three or four months. Explain that saving part of their pocket money and doing extra chores around the house to earn extra money will boost their savings and enable them to reach their goal much faster.
  • Include your older children in planning the household budget. Explain the difference between wants and needs and demonstrate how spending should be prioritised accordingly.
  • Teach your older children about planning their spending and sticking to their own monthly budgets. Explain that the amount they spend should not be more than the amount they have – whether it be pocket money or cash earned from doing household chores or a part-time job.
  • Don’t lend your children money if they don’t have enough to last them until the end of the month. Bailing them out in this way will lead them to believe that there will always be someone to rescue them. Let them experience the unpleasantness of not having enough money to do what they want.
  • Encourage your teens to read their ATM statements, pointing out how withdrawals and deposits affect their balance. Watching their balance increase as they save is also a source of encouragement.
  • Teach your child that they have to payback money they have loaned. If they borrow money from you for whatever reason, deduct a specified amount from their monthly allowance each month until the money is paid back. It is even a good idea to charge them some interest!

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