“As the money makers of the future, it is advisable for young children to become familiar with what it means to earn an income and make sound financial decisions,” said Neil Thompson, from African Bank.
Children are often bitterly disappointed to discover how quickly money disappears. This is where early advice and guidance about smart investment and other opportunities come into play.
He said that teaching small children about investing can be easily demonstrated to even very young children.
“Use the planting of a veggie or flower garden, for example.
“Take a seed and have them plant it, take care of it and nurture it into a beautiful flower or tree. Their attention to this project each day, as they curiously watch for signs of growth, will pay off as the days and weeks go by and they see the reward of the hard work they’ve invested in their garden.
“Your child’s garden could, however, be a big disappointment if the seeds were planted in the wrong area of the garden or during the wrong season.”
As their parent, you would advise and guide them every step of the way in preparing their garden, ensuring that they are making the right decisions and will be rewarded for their hard work.
“To save money and be able to recognise a smart investment opportunity later in life requires the same type of guidance from a reputable investment consultant.”
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Teach your children about investing:
- Ignite their entrepreneurial spirit. Every child would love to earn their own money, so help them by brainstorming a couple of ideas they can put into action from home, on the internet or even in your driveway. Why not start with a simple garage sale of their old books, toys, clothes and sports gear?
- Explain the difference between saving and investing. Keep it simple. Investing may sound complicated but it really isn’t, explain that investing is about making the money they have saved work for them to make even more money.
- Lead by example. Talk to them about your own investments and show them how you are reaping the rewards of making the right decisions with your money. You can’t invest without money, so also be a good example of someone who cares enough about their income to put a portion of it away each month for a rainy day.
- Help them to set financial goals. They should understand that the money being saved or invested is for a specific purpose and to reap the reward is worth the wait. The journey to the reward is made that much sweeter when you know what to invest in.
- Create a place for them to save. This could be a piggy bank if they are very young but should be their own savings account at a bank if they are a little older.
