- The joy of waiting
The line between needs and wants is easily blurred. Thanks to technology, we now have instant access to everything, from information to food and any other commodity we desire. We also buy and discard things quickly, leading to a lower appreciation of what we have. ‘We struggle to wait,’ Mimi says. ‘This creates a generation of entitled individuals who want everything now, resulting in high debt levels.’
There is nothing wrong with taking the slower, safer route. Teach your children from a young age that being fast and quick isn’t always better. They must understand the pitfalls of debt and how to achieve their goals in life by saving. This also teaches goal-setting, budgeting, and the joy and appreciation that come from finally buying an item with hard-earned cash.
- Age-appropriate lessons
You know your child better than anyone else, so follow your instincts. Start simple by teaching money lessons in everyday situations such as shopping. Explain how prices for different items vary based on their quality and brand. Highlight the issue of choices, where the lower the quality of an item, the more of them you can buy with the same amount of money.
‘Once they can do simple maths, talk to them about how much you can buy with a certain amount of money, laying the groundwork for budgeting,’ Mimi advises.
Be mindful of their age and ability to process information. Your child may be intellectually capable of processing the information, but they must be emotionally prepared to absorb the lesson.
‘For instance, be sure that your child is emotionally prepared to learn about debt, indebtedness and the burden that it can create,’ says Sue. ‘Affordability is another concept that children must be emotionally ready to understand in order to prevent them from becoming fearful about a lack of funds.’
- Make it fun
If your money lessons are enjoyable, your children will associate money with positive and happy feelings. Use games so they can learn through play. Mimi recalls that her daughter’s favourite toy was a plastic cash register, and they spent many happy hours playing ‘shop’. Board games, such as Monopoly, teach children how to budget and plan in a safe, fun environment.
Sue suggests that using a daily desk calendar and a packet of Jelly Tots is another clever way to teach children the joys of saving and compound interest. Place one Jelly Tot on the first day of the month. On the second day, place two; on the third day, place four; and so on. ‘While the maths is incorrect, the concept of growth upon growth becomes a visual one for the child,’ she explains. ‘The game becomes more exciting as the days pass, and it’s not only a great lesson in compounding but also a fantastic way to teach delayed gratification.’
- Use tech to teach
There are some innovative digital tools available to help children learn about money, including the Sanlam Savings Jar app, Twinkl’s Spending Spree game, MoneyTime Kids and the Story Wise Kids books.
Most banks offer savings accounts for children under 16, including Standard Bank’s (sum)1 banking account, Tyme- Bank’s EveryDay Personal Account, FNBy Account, and Nedbank’s MiGoals4Kids. These bank accounts include apps and online functionality to teach children how to save, budget and transact online.
Older children can also learn more about investing in the stock market by opening a dummy share-trading account, which is available on most share-trading platforms. Sue explains: ‘This is an excellent opportunity for them to understand the stock market, how shares are traded, risk and reward, and the value of generating passive income.’
- Essential online skills
We transact online all the time, so teach your kids how to do so safely and responsibly. As they grow older, they must understand the fees associated with online transactions, how to monitor their online accounts, how to create strong passwords to protect their accounts and how to recognise phishing.
- Don’t cause undue stress
Teaching your children about money shouldn’t cause stress or make them worry about money. ‘Sharing how much you spend on food or rent may be too much information at a young age,’ warns Mimi. ‘Rather leave those conversations for when they’re older, and it is more relevant in the context of them eventually living on their own.’
