In an age where we pay accounts online and make purchases at the supermarket with a piece of plastic, children don’t get to understand the value of money. They therefore need to learn that even though they can’t always see it, money is real and it doesn’t grow on trees or in cyberspace.
Robyn Farrell, executive head of 1st for Women Insurance, shares tips for mothers who want to instil good financial habits in their children:
- Introduce young children to the concept of saving by buying them a “piggy” bank and encouraging them to put coins in it. Every week, tip out and count the money so that they can see how the number of coins grows as they save.
- Include your older children in planning the household budget. Explain the difference between wants and needs and demonstrate how spending should be prioritised accordingly.
- Teach your older children about planning their spending and sticking to their monthly budget. Explain that the amount they spend should not be more than the amount they have – whether it be pocket money or cash earned from doing household chores or a part-time job.
- Encourage your teens to read their ATM statements, pointing out how withdrawals and deposits affect their balance. Watching their balance increase as they save is also a source of encouragement.
- Teach your children to pay back money they borrow. If you loan them money for whatever reason, deduct a specific amount from their monthly allowance until the money is fully paid back. It is even a good idea to charge them some interest!
- Play games – Monopoly and The Game of Life, apps and online games, for example, can teach money management skills and the importance of planning ahead.
- Talk about money. Let your children hear you discuss your financial plan and the arrangements you’re making for retirement, for example. This could simply be having a conversation with your spouse while your children are in the room. This way, they can understand that saving is a lifelong endeavour.
