This Heritage Month while many South Africans will be celebrating their cultural wealth as a nation, the financial legacy that they will be leaving behind for future generations is often overlooked.
James Williams, head of Marketing, Wonga said that money talk is a taboo topic amongst South Africans and financial education is left out of the national curriculum even though it plays a vital role in adulthood.
Budgeting, saving and investing are just some of the ways that can give a future generation financial security.
“Creating a financial legacy that can help you and your family sustain wealth hinges on one crucial factor and that is financial knowledge. It is important to educate young people on how to manage their money,” Williams said.
Here are some of the ways children can be taught about managing money:
Daily financial tasks
Get your kids involved in daily financial tasks such as paying bills. Parents need to talk to their kids about setting financial priorities, the importance of saving for the future and give them space to weigh in on the pros and cons of household purchases.
Effort and reward
Once their kids are old enough, parents should consider paying them an allowance for helping around the house that will allow them to practice money management skills.
“Simple rewards systems such as earning money from washing the family car over the weekend or cleaning the pool can be a great way to reward good behaviour as well as better school results and completing household chores,” Williams said.
Money management habits
Kids can be introduced to healthy money management habits by encouraging them to start saving for the things that they want to buy.
Parents should also encourage their kids to share their financial goals and work with them to create a plan to that will help them achieve those goals.
“Identify your short-term and long-term financial goals. This will keep you on track and enthused in executing them,” Charnel Collins, CEO, National Debt Advisors said.
Wants and needs
Parents can show their kids the difference between want and need by setting a good example for them to follow.
Williams said, “By going on extravagant shopping sprees when you can’t afford to, is not going to teach your child restraint.
“A legacy of saving, investing, wealth preservation and responsible spending will go a long way to ensuring that your financial legacy truly lasts, and does not end with the next generation.”
IOL Business