Money management 101 for kids
Society has grown accustomed to seeking instant gratification, and unfortunately South Africans are often referred to as materialistic and in debt. The Covid-19 pandemic has seen many of us learn the hard way when it comes to managing our money, which is why now is also the perfect opportunity to teach our children to do it differently. in order to be better prepared for the unexpected. .
Did you know?
According to Christelle Louw, consulting partner at Citadel Wealth, a SARB study found that the average South African spends 70% of their income on debt.
Louw says it’s important to encourage kids to start managing their money early on.
“Parents normally want to provide their children with the perks and perks that they have never enjoyed, and recklessly lean towards material things and spend a lot of money on instant gratification for their children. But, the greatest gift they can give to their children as well as to their own futures are the long term rewards that grow over time.
According to Louw, parents should teach their children the principles of sound financial management, involve them concretely in budgeting and saving, demonstrating the gains made and the solid foundations being built for their future.
Open a savings plan
To get started, consider opening a savings plan to which you, as parents, contribute the same amount that the children save. Seeing the amount increase will encourage children to save more and it will also help them understand what the tangible benefits of this saving will be in the long run.
READ: How a Budget Can Help You Reach Your Savings Goals
To be rich VS to be rich
Children are constantly exposed to materialistic things through social media. This is a great opportunity to counter that, by explaining to them the difference between being rich and being rich.
Being rich can be tied to spending most of the cash, looking for the role, and looking for the limelight. Wealth can be described as the accumulation of assets which is less spectacular and showy on the surface but has solid and reliable results. So teach your kids that long-term stability matters more than flashy social status.
The golden rule when it comes to money
One of the golden rules to teach your children is not to spend what they don’t have. Teach them to plan ahead instead of lending Daddy money. And allow them to reward themselves when they hit their financial goal.
Make your teenager think
The words travel, a good education and a fulfilling lifestyle are often appropriate for teenagers. Remind them that with savings, they will be able to travel, enjoy college more, and maybe even buy a car.
“Having options and choices is a very powerful motivator,” Louw says, and having them in these uncertain times has actually become a necessity.
Help your kids budget
As a parent, it is your responsibility to guide your child in financial planning and making wise money choices. They might not need a financial planner yet, but helping them create long-term strategies (not quick fixes) might point them in the right direction. Talk to them about their monthly needs and help them find ways to fund their short and long term goals. This will create a solid foundation for them from which to build a financial strategy.
Remember to teach your children to avoid splurging on temporary pleasures and instead create a proper financial plan that will allow them to reap the long-term benefits.