Teaching children about the value of money from an early age will empower them to make sound financial decisions throughout their lives.
Ryan Prozesky, the chief executive of Value Banking Solutions at First National Bank (FNB), says it's important for parents to teach their children about money and allow them to manage their own finances as soon as they understand the basics of maths.
He has the following tips on how you can start teaching your children about managing and saving their money:
1. Importance of saving: Encourage your children to plan ahead and save money to achieve their desired goals. Putting money away for them and allowing them to watch their money grow will teach them to be more patient and disciplined with their money.
2. Bank account: A kids’ banking account is a great tool that children can use for monitoring, managing and saving their money. Having their own bank account will teach them the responsibility of managing their own finances. Enabling children to see their money via digital platforms is a fun and interactive way to educate children about managing their money, while also being safe and convenient for both parent and child.
3. Budgeting and spending: Help them to draw up a budget each month and let them take control of their spending. For example, allow them to allocate a budget for necessities, such as school stationery, savings and pocket money. Whenever possible, go shopping with them and guide them when necessary. It is never too early to teach your children the principle of “paying themselves first”, by first allocating any pocket money to their budgeted savings before spending, and not saving only if there is anything left over after their monthly spending.
4. Reward effort: Be mindful not to give your children too much pocket money without them putting in an effort to get it. Ask your children to help out with household chores and reward them based on their contribution. This will help them to appreciate the value of money. For example, ask them to help with washing dishes after dinner or your car over the weekend to earn extra pocket money. This will teach them discipline and make them understand that money is earned.
“Don’t wait until your kids start high school to teach them about the principles of money management. The journey to financial freedom should be cemented from a young age,” Prozesky says.
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