Your children learn their money habits from you! Be the best financial role model you can be, not just by doing the right thing, but by sharing the why and how with your kids in ways that they understand.
Here are some of the best money messages you should give your children:
Compare price AND quality
It’s easy to show a child from an early age how to compare costs of similar products. Ask them if they can work out which is cheaper or costs less money. As they get older, you can even enlist them in more complicated calculations about costs per volume – let them use the calculator on your phone. But make it clear that cheaper isn’t always better and show them how you judge quality as well. That cheap plastic toy that lasts for a day? There’s a good example!
Think before you buy
If your child really wants something, teach them the steps that go into considering if it’s worth it. Do they have something like it already? Will they still be using it in six months? Can it wait until they’ve saved for it? Is there something else of the same value that they want even more? It’s hard to help a child to exercise impulse control but teaching them to stop and think is an excellent first step.
Let your children hear you working through your decision of whether or not to buy the things that you like in the shops. This will show them that you also want things, but that you don’t always indulge yourself (this works best if it’s true!). This can lead into a discussion about distinguishing between needs (things you must have for survival) and wants (things you’d like to have).
But, every now and again, treat yourself
While it’s important to show your child that you don’t impulsively buy every little thing you want, you can also teach them that a little responsible indulgence can be OK. Enjoy the treat together and explain why you are making an exception to the “needs and wants” rule. If you’ve had to cut back a little on something else to afford it, then explain that too.
Sometimes, you can’t afford it
Parents often try to shield their children from money worries, which is good. But sometimes, this shielding can stop you from sharing the straightforward realities of money management. There’s no harm in saying, “We need to pay the bills at the end of the month, so we can’t go out for pizzas this week.”
You can even make a game of it and enlist your child’s help in working out where you can save, or what meals you could make with what’s already in the cupboard. You might be surprised at the solutions they come up with.
Do a budget
Explain to your child that you do a budget each month so you know what you can and can’t afford. Then help them to understand how it works by getting them to draw up a simple budget for their pocket money and the things they want to buy. Keep it simple and practical so that a child can understand it and internalise the principles. Let them think of all their expenses, like birthday presents for friends, tuck shop money, airtime or outings and give them a spending limit. Let them try to work out how much to allocate to each item or activity.
Save some of what you get
Set savings goals for the whole family and keep track of them in a tangible way. If you all have bank accounts, do a chart of savings goals for the fridge. For younger kids and smaller amounts, you can use jars and piggy banks, and watch the actual money pile up. You can even agree to reward your children for meeting certain milestones with a savings bonus to keep them motivated.
Be kind to others
Encourage your child to donate some of the money you give them to charity. There doesn’t have to be a hard-and-fast rule about how much or how often but show them how you approach charitable donations and encourage them to do what they can, even if it’s popping a R2 coin in the collection box at your local store. This is great for teaching them to be kind to others, and also to be aware of their own good fortune.
Make sure you’re the best financial role model you can beYou are your child’s first and most important money role model. If you feel that your money habits could do with a bit of fine-tuning, you could sign up for a course on personal finance management or how to bust your debt. Truth About Money (TAM) has a great one and is offered at no cost for qualifying applicants. And remember to share and model every great new habit you learn.
Make a model of yourselfYou are a hero in your child’s eyes, so make sure that when it comes to money, you’re a superhero. Let them be your sidekick, and they’ll learn from the best. You’ll probably find that your spending and saving habits improve as well.