Teaching Kids About Money Matters
It’s Youth Month, and the perfect opportunity to focus on how we can build the youth of South Africa by educating and informing them. Something that we don’t really get taught in school is the proper management of money and how to take the right steps to growing an income through investment, budgeting and saving. Educating the youth of today on money matters can only put them in good stead to adopt healthy financial habits later in life.
The Importance Of Pocket Money
Money management begins early in life when kids start receiving pocket money. Whether they decide to blow their money in one go on a stash of sweets, or save it responsibly for something special, is entirely up to the child. But as an adult, you can influence this decision-making process.
If children want to buy the Lego set they’ve had their eyes on, they can be taught to save for it over a few months. This gives them the understanding that not everything can be purchased on the spot, that patience must be exercised, and sometimes things need to be budgeted for. It will also teach them the value of saving, as they shift their focus from the sweets to the prize at the end of a few months.
Commit to giving your child, niece or nephew a certain amount of pocket money every month, and try to encourage them to adopt healthy spending habits.
The Importance Of Investing
Opening a savings account for a child is a great idea, especially if you keep them involved in the process. Whether you’re a parent, an aunt or uncle or simply a friend, depositing money into a savings or investment account for a child offers them first-hand experience with important actions they will need to take later in life.
Whether you deposit R20 or R200 into the account every month, keeping the child involved in the process and allowing them to watch the money grow will teach them the value of saving and investing. They will no doubt want to take the money out sooner, rather than later, but they will soon understand that if they wait for longer, that the value of their investment or savings will increase over time.
Commit to helping your child save over a period of time and let them see how the money grows month-to-month.
Importance Of Making Your Own Money
Children will quickly learn the value of money when they understand what it takes to earn it. Allowing them take on various chores and responsibilities in exchange for money will show them that they need to do in order to earn a certain amount of money. Then once they understand what they can get for that money, they will see the associations between earning and spending.
Commit to paying your children a small amount for doing certain activities. For older kids it can be learning experiences that could even contribute to future career choices. Keep this consistent so that children may begin to consolidate their earnings.
Importance Of Value
Whenever you’re in the shops or about to purchase something, allow children the opportunity to see and understand what things cost. Show them the difference between two branded items that are the same, but different in costs. Explain to them why buying one is better than the other – either because it is better quality or better value. Value comes in all shapes and sizes, and it’s important to be able to see where spending more is necessary and where it is not.
Resources: Photo by Fabian Blank on Unsplash and information from https://www.mint.com, https://www.forbes.com.