While this initial step is great in helping them set up their life goals, children should also learn the basics of saving and investing from a young age.
“The only way your children will start building this saving persona is by learning about money matters from a young age, understanding how it can work for them and being given the chance to start managing their finances on their own, with positive guidance from parents.
“Assistance and guidance is necessary in ensuring that they save for the right things as opposed to undisciplined spending on anything that catches their eye. This early savings habit could also help in ensuring that they have access to savings in the event of an emergency,” said Ancley Jacobs, from FNB.
He added that building a culture of saving is important. With ongoing price increases, inflation and economic pressures, consumers are left with a little less in their pockets at the end of every month. Saving money regularly will teach children the power of being able to buy bigger and more meaningful items after disciplined saving, such as a bicycle or games console, rather than many small items that quickly lose their appeal and value, such as unhealthy snacks or low-quality toys.
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Jacobs suggested the following tips to help your children start saving from a young age:
- Talk about savings. The very first step in the process is to openly talk to your children about savings and investments and lead by example.
- Goals. Help your children to start saving with a certain goal in mind which will be dependent on their age and life stage. Get your children to draw up a list of things that they want and need, like a game, book, remote controlled car or gap year, and encourage them to start savings towards that goal.
- Wallet or piggy bank. Encourage your children to put their spare change or notes in a piggy bank or a wallet. This is one of the easiest ways to teach younger children to start saving.
- Match funding. To kick-start their savings you could match or contribute a percentage to your children’s monthly savings. This additional reward will give them a reason to save more and something to look forward to.
- Be innovative. Look for fun and innovative ways to help your children save. Use colour envelopes, jars, bottle caps and games which will help them understand the concept of savings.
“It’s never too late to help your children to start saving and investing, but the earlier you start saving the better in the long-term. This mindset will help your children become financially independent in the future.”
