Our relationship with money is psychological and deeply rooted in the language, habits and behaviours that were modelled around us when it comes to having money – or the lack of it.
Ever found yourself repeating the same habits your parents had when it came to money?
Whether it be overspending whenever there was a windfall or erring on the side of caution when it comes to being thrifty, our relationship with money is established in our childhood years.
If this relationship results in being at ease around money and having a healthy attitude towards it, then you're set for a life of relatively little anxiety about finances.
If the relationship results in feelings of lack, running out, never having enough and a perpetual cycle of broke-ness, that's when it's time to seek the help of a money or life coach.
To ensure that your kids don't end up inheriting some of your bad habits, here are some of the healthy money behaviours you can instil in them from a young age, according Aneesa Razack, CEO of FNB Fiduciary, and Ilse Smuts, Product Growth Head at FNB Cash Investments.
- Talk to your children about money
"This is the first step in helping your children understand the concept of money or money management. Use practical day-to-day scenarios and try not to overwhelm them with information."
Read more | How to raise a money-savvy child
- Show your children how to map out a budget
"Involve your children when you put the monthly family budget together. A great start is to help your children track where their money is going, is by having an up-to-date budget.
"Your children’s budget should include their savings, expenses and those events that they enjoy doing like going to the movies, purchasing toys, books etc.
- Make savings a family project
"One of the easiest ways to get the savings project started is with their pocket money or their monthly spend allowance – if your budget allows.
"Set goals and encourage each family member to save up for your family project – such as a Mother’s Day, Father’s Day, or birthday gift for your siblings. Savings don’t have to be for something specific all the time. You can even save and contribute towards a winter soup drive for the disadvantaged."
- Help your children open a bank account or an investment account
"Encourage your children to put their money into a savings account.
"You can help your child or teenager track and make sure their money is safe and they’ll learn about the power of compound interest (earning interest on interest), when it comes to growing their money.
"Another worthwhile recommendation is to get your teenager exposed to start investing in Unit Trusts, Exchange Traded Notes or shares for as little as R10 from global brands such as Apple, Amazon, Facebook, Microsoft, Alphabet (Google), Netflix, Tesla, Coca Cola, and McDonalds – which they can acquaint with a young age for their long-term goals.
"The tax-free savings account is a very powerful investment vehicle that as a mother you can get for your child as it can supplement his/her retirement and with a sizable tax-free investment portfolio available to the kids once they turn 18 years old, you can offer your children a head-start in life."
- Instil a habit for savings and reward
"Kids receive pocket money, which they typically use for entertainment and snacks. It's critical to instill in children the idea that money must be earned and isn't only for spending – one must save.
"Get your kids involved in household chores like dishwashing and give them rewards based on how well they perform. This will encourage children to value money and use it wisely."
Read more | Thinking of setting up a trust for your kids? Here are the ABCs of testamentary and inter vivos trusts
“Given the tough economic environment that we are living in, we need to understand the importance of teaching children about finances from a young age. There is a common assumption that you need to be an expert in finances to teach your children about money, but that is far from the truth. And there’s no best time to strike up a conversation about money as it’s ongoing and you learn about money/finances along your journey,” adds Ilse.
“I am motivated by the proverb: ‘Train a child the way he should go and make sure you also go the same way’. This is the cornerstone to enjoying parenthood and the reason that I have become intentional about what I teach my child including their behaviour with money”, says Aneesa.
“Being creative in your money management lessons will help in driving the importance of money to your kids and this will also help them remember in years to come,” Razack explains.
“Additionally, as children imitate what their elders do, it is important for parents to be wise with money management in front of their children so that they can learn the greatest money skills from you," Ilse advises.
"Kids will benefit from knowing that one needs to make priorities while spending money and that one should set goals.”
Every mother wants to see their children happy, and the best gift a parent can give their children is to start teaching them about money management as early as possible. This will prepare their children to be financially independent and wise adults when they grow up.
