By Nico Strydom
With the festive season around the corner the temptation to spend money usually becomes greater and it is a good time to teach your children important money lessons.
The website JustMoney recently asked a number of children what money means to them. Many of them realise the importance of money and the value of saving as a way to reach their dreams.
The children were asked four questions, namely what is money, why is it important, what does it mean to save, and why is it important to save. According to Sarah Nicholson, commercial manager at JustMoney, almost all the children understood that we need money to buy stuff and for that reason it is important. On the question about what it means to save, the children replied that it means to set money aside, like in a piggybank. As to why it is important to save, the children agreed that you save to buy something you would like to have or that you need.
According to Nicholson, it is important to cultivate a saving culture in your child as early as possible. It is therefore extremely important to talk to your children about money. “It gives you the opportunity to cultivate good money habits in your child at an early age. It could mean the difference between whether they will grow up being financially responsible or being individuals unable to manage their living costs.”
It could be intimidating to teach your child about money, but perhaps you are already doing it without realising it, says Nicholson. “It’s important to start early, when your child is still young. Traditionally you buy your children a moneybox or piggybank so that they can see how they save money and how it accumulates over time.”
Make use of everyday occurrences, such as shopping trips or paying accounts, to convey financial concepts in a fun and practical way. “As a parent you have to set the example. Show your children what it means to be financially responsible by paying accounts on time, setting money aside in an emergency fund and saving.”
Children should also be taught about budgets. “Help your children to set goals for what they want. If you give your children pocket money or reward them for their chores, they can deposit it in their bank account and save it to reach their goal.”
According to Nicholson, it could also be of value to help your child to save for an expensive or large purchase. “It will help them to get used to waiting for satisfaction and also to understand the difference between necessity and desire.”