Be a teacher, raise financially savvy kids
Turn off the light when you go to sleep. Don’t waste food. Share your toys. No sweets before dinner. No drinks before bed. It’s funny how so many of the lessons we learn as children only make sense as we grow older! This is especially true with financial lessons.
The skills and habits we learn as kids have a significant impact on our financial behaviour as adults. These skills are most often taught by our parents through conversations and their relationships with money. If you are a parent, here are a few steps you can take to give your kids the financial tools to build a brighter future.
How to raise financially savvy kids
- Watch what you do
Children will most likely end up following your example as they become adults. Setting the right example in your relationship with money gives your children a sound foundation on which to build their financial future.
- Teach them the value of money
Even at a young age, kids can understand the concept of more versus less. You can introduce your kids to money as soon as they can count. Simple things like encouraging young children to read price signs at the shops and including them in your budgeting will ensure that as they get older, they will understand how to prioritise their spending.
- The importance of an allowance
Giving children an allowance helps them to build money awareness. It’s better to make a mistake at 10 years old with R50, than at 30 years old with R10 000. Decide on an allowance amount that matches your child’s age and ability to handle money. Make them earn it too, through chores and special tasks. Teaching them that money is earned, rather than just given, helps them to appreciate it more and apply some thought to their spending.
- Help them save
Setting up a child savings account can teach your children about interest, fees and other important banking concepts. African Bank now offers MyWORLD, an all-in-one banking solution- that’s made to share. MyWORLD allows parents to create up to 5 unique Pocket accounts to share with their kids.
A Power Pocket is a separate account linked to your Primary MyWORLD account. This account has its own unique account number, pin and bank card. Parents can use Power Pockets as a great way of teaching kids about banking and saving. Because it is linked to your Primary account, you are able to see how and where your child spends his/her allowance and teach them vital money management lessons based on their spending/saving habits. And because your child will have their own bank account, they get a hands-on experience with money.
The most impactful financial lessons are learned from everyday moments, like when your child notices that you save receipts or keep a record of your spending on your phone. The opportunities to teach these important lessons are there, so take advantage of them throughout your child’s life.