Here are some ideas to help you be a more savvy money mentor for your kids as they learn about money and how to handle it.
1. Speak to your kids about money matters
Children are often left out of financial conversations, especially if finances are tight. Regular constructive money conversations with your kids will ensure they feel more secure now and give them a better chance at a financially healthy life. Help them – age-appropriately – to understand where money comes from, how it is earned, what it is worth and how to spend, save and invest it wisely. Keep learning about financial concepts or new solutions and share your knowledge with your family.
2. Do it together
Include your kids in your financial goal-setting and planning; show them your household budget and how you stick to it; and let them help you track your savings and investment performance. Studies show that kids who are included in the day-to-day management of household finances display healthier financial decision-making and understanding when they’re older.
3. Let them experience financial decision-making
As soon as kids understand the basics of maths, parents can give them appropriate opportunities to make their own money choices, to experience the consequences, and to learn from their decisions. For example, allow them to decide on their own how to spend their birthday money or give them a choice between two purchases or gifts that cost the same to help them understand how to get the most value from every rand.
4. Encourage kids to save
Piggy banks, money boxes or even savings charts are time-honoured ways of helping kids experience the satisfaction of watching their savings accumulate. For older children, a savings account not only offers a safe place to keep their savings, but also an opportunity to begin understanding the basics of financial literacy, including interest, deposits, withdrawals and statements. Positive reinforcement is also crucial – be sure to praise and take pride in your child’s efforts to save. You could even encourage their saving efforts further by matching your child’s contributions rand for rand.
If there is room for improvement in the example you are setting for your kids, remember that your financial coach is always ready to help! Simply click here for assistance to become a more savvy money mentor for your children, so they will learn sound financial behaviours that will benefit them throughout their lives.