Teach your children about money while they are young

The festive season allows us to spend some time with family and friends.

There’s no better way than to spend this valuable time with your children and educating them about the value of money.

As parents, we want the best for our children.

You want them to get the best education possible, live in a decent community and provide them with suitable and safe transportation for school-related activities.

You want them to have all the things you never had and more.

All these things contribute to high expenses and that’s part of the reason why so many South African parents are in debt.

You don’t want your children to live their lives paying off debt.

So, what can you do to teach them early on how to deal with money and build that skill for life?

Lindi Monyae, managing executive for Liberty’s emerging consumer market said, “With knowledge comes power.

“By putting yourself in the driver’s seat of your children’s financial education, you can help them to successfully navigate any financial challenges that may come their way for now and the future.”

Five tips to teach your children about money:

• Start teaching them early:
The younger children are when they start learning about money the better. You could consider teaching them about where money comes from, why you pay for goods and services or why it is important to use money accordingly. Make the lessons as practical as possible by getting them actively involved in the world of money. You can also get a variety of children’s books on financial education and easy ways to learn about managing your money.

• Teach them how to budget:
Try not to scare your children into adopting a budget. Instead, show them the benefits of not spending more than you earn. Teach them to earn pocket money, save it up and spend it once or twice a year on something special. Make sure that they understand the importance of time, especially when it comes to saving.

• Help them understand the value of goods:
When you’re shopping, have your child read out the prices of your groceries. Try to pay with cash, so that the child can see you receive your change. Make it fun and engaging. Allow them to transact with the cashier, especially when you are buying gifts for them. By seeing the cash, they’ll soon understand its value.

• Practice what you preach:
Children learn from their parents. So, when it comes to your money, put what you’re teaching your children into practice. Show them that you’re actively working towards reducing your debt, paying your bills and fulfilling your financial responsibilities. Try not to panic about money in front of your children, they’ll pick up this energy from you.

• Find the right financial adviser:
Introduce your children to your financial adviser. If you do not have one, find one that you resonate with. If you decide to take out life insurance, a funeral policy or make a long-term investment, introduce your children to the adviser. This will teach them that to get the most out of their money, they need to make the right financial moves.

“No matter the size of your pay cheque, sound financial advice is invaluable.

“Teaching your children this gives them a better head start towards good financial management,” explained Monyae.

“While you are teaching them, you might gain a penny or two.”