From branded clothing to the latest PlayStation console to tickets to Disneyland, our kids are bonafide experts when it comes to nagging for the best that money can buy. But do they know what it actually takes to finance the items on their ever-increasing wish lists?
Do you ever feel like you’re being watched? We’re not talking menacing stalkers but rather our children, who primarily learn how to interact with the world through observing us. Naturally this extends to our relationship with money. Yet it’s not just about setting a good example, it’s also about having age-appropriate conversations about finances.
Talk about it
Money should never be a taboo subject around your kids as this will only promote fear or uncertainty around the topic. Rather promoting financial literacy early on can help secure their financial futures. Even when our children are in nursery school, we can help them develop an early understanding of money by pointing out prices during grocery shopping – showing how one chocolate costs more than another for example.
As they develop an understanding of numbers, you can also allow them to add up the cash in your wallet as this makes the concept more tangible. As they grow older, explain how you earn money, how you allocate funds to monthly expenses and how you budget with what’s left to pay for their clothes, tennis lessons and so on. Make it relevant to them.
Early earnings
Paying for the occasional treat is one thing, but if your kids see you as an unending source of funds, they’ll likely see you as their human ATM. Rather, consider giving your children pocket money for helping around the house, so they get a taste of what it’s like to earn their money. When they’re older help them find a weekend job, providing some financial independence.
Smart saving
In a world characterised by instant gratification, putting money in the bank to save for an unspecified rainy day can seem like torture. Yet, the earlier our kids make saving a habit, the more entrenched – and lucrative – the practice will become.
Discuss something special they’d like to save for and help them open a savings account or invest in stocks of their favourite brand, creating excitement around their financial journey. Encourage your kids to keep a portion of their savings untouched, so they always have funds to fall back on. Set savings challenges to keep them motivated by, for example, offering to match the first R1 000 they manage to save. Let them know you’re in it together.
