EDUCATE: Unlike in days gone by, it is important to teach your children about money as early as possible and experts agree.Picture:
Experts impart some financial wisdom for growing families, writes Marchelle Abrahams.

Back in the day talking about money was taboo. Chatting about it to our children was basically unheard of. Parents spoke in hushed tones behind closed doors if they couldn’t make ends meet. Children were given a few coins for chores done around the house and when it came to Christmas you could expect a few crisp notes.

When it comes to the 15th of every month, Shaun Andrews hands over pocket money to his 12-year-old son, but only on condition he does his chores.

The civil servant believes it instils a sense of financial discipline but he also wants his child to learn about saving.

Lou-Anne Daniels gives all three of her children pocket money once a month.

“There are real occasions where they ask for a top-up but then they have to justify why they should be given more money,” she says.

She feels it teaches them to budget and it gives them a measure of financial independence.

“It’s important to remember that every child grows and matures at a different rate,” says Erica Sandberg, the author of Expecting Money: The Essential Financial Plan for New and Growing Families.

She suggests parents start practising counting money with their children by the age of four, while they should be given an allowance by age six.

“While we all want what’s best for our children by ‘protecting’ them from the world of money, this can also be detrimental to the way they handle their finances later on in life,” says Eunice Sibiya head of consumer education at FNB.

But she also does add that it’s never too late to change our mindset by adopting a positive attitude towards money and how to manage it. Here are her suggestions:

Start off early

Introduce your kids to simple money concepts as soon as you can.

If they are fairly young you can get them to pay for something in the shopping queue and also help them identify the difference between a want and a need.

“Older children may even have the ability to grasp more complex concepts such as compound interest or credit,” she adds.

You don’t need to go into detail, but can simply show them that they will be paying more for the same item if they buy it on credit.

This is also a good time to teach them how interest can work in their favour by opening up a savings account for them.

Give them more control

By giving your child some measure of control over their own money you will be empowering them to make important financial decisions.

“Set up a bank account and, under your watchful eye, let them make their own transactions such as airtime purchases or swipes,” advises Sibiya.

They will soon learn about banking fees and how some transactions are better for their bank balance than, for instance withdrawing cash.

Let them make their own purchases

It’s easy to simply buy something for your child outright or tell them you can’t afford it and move on. But making your child think carefully about their purchases will put them in good stead for the future.

If your child points to something they really want, make them weigh up the options of purchasing it by asking if they can afford it. They will have to consider how much money they have put away and whether the cost of the item is worth it.

“You can help them come to a decision or gently steer them if they look like they will blow all their money on a plastic action figurine. But the point is that if they have blown all their cash on something the previous week, they won’t have money for something they really want and that is how real life works,” says Eunice.

Pocket money: how much is too much?

Giving children too much pocket money can be detrimental to future good financial behaviour. Some parents go as far as giving their children R50 a day for the school tuckshop.

“They aren’t in the habit of saving it so they feel that they must finish the money every day as they will be getting the next cash injection tomorrow.”

The best way to approach the issue of pocket money is to discuss with your partner about how much is a reasonable amount. Most importantly encourage your child to save a portion of it.

Actions speak louder than words

Children often learn bad financial habits through the actions of parents.

“If we as parents demonstrate good savings habits and even better spending habits on a daily basis, our children will be educated through our actions. It is not only about what we teach, but also about what we do,,” concludes Sibiya.