It’s never too early or too late to learn about money. Whether we like it or not, it makes our world go ’round. How many adults can say they’ve had an unexpected financial experience happen?
Raise your hand!
From childhood to young adulthood, there is a lesson for every age group. And financial habits establish themselves as early as seven years old. Don’t wait until your kid’s getting their first job to teach them about their paycheck.
Are you a parent that wants to impart smart habits? What exactly should you be teaching children about money to set them up for success?
Look no further! Here are 5 important lessons to teach your youngins about being money-conscious.
1. Less is More
Teaching children about a minimal but fruitful lifestyle is best done by example.
Overspending doesn’t equal happiness. It equals clutter and less room for creativity and imagination. Teach less excess, less consuming.
Show your child that less is more by spending money on quality or local items. Invest in things that are special and worthwhile. Spend the extra money on adventures, museum trips, and the like.
2. Savings Are Necessary
Most households in South Africa are saving 0.2% of their income.
The sad fact is that South Africans ages 31-49 find it hard to save. Their money goes to childcare and caring for their parents. But if you can manage, a Tax-Free Savings Account is a great thing to start with a young child to teach the value of money.
3. Compare Prices
Teach the value of price-checking. Bargain shopping and coupon cutting are key ways to save more and spend less on a daily basis.
Teach your child to be a little skeptical. There may be a cheaper – and smarter – option right around the corner, if only you swallow the impulse.
4. Earn It
As a child, it’s easy to believe certain things. Like if you’re in debt, you can print more money to pay it off. Or the ATM box dispenses cash, no matter what. Money is endless and your parents are rich.
How can we abolish these notions? By setting up an earning system.
Teach your child the value of working for their money. Small chores throughout the week allow them to understand working for what they want. Let them decide if they want to spend or save their allowance – and use the opportunity for a lesson.
5. The Importance of Charity
This can mean many things. If you don’t have enough money to donate, consider giving away old clothes that no longer fit. Old toys that no longer thrill.
Go through the house with your child and find things to donate to charity. Or volunteer at an animal shelter. Show them the ins and outs of the economy, both prosperous and not.
Teaching Children About Money?
Then teach them all the things you wish you would’ve known growing up. What financial mistakes did you make? What can you warn them about?
There is no one-size-fits-all to these lessons. But no matter what you teach, be aware of your influence on your child’s habits.
If they see you spending money on lavish items, they may be more inclined to have loose saving habits later. And if they see you being frugal, saving up for important purchases? They may end up doing the same.
South Africa’s debt to income level remains high at 72.5%. Do we want the younger generation to flourish beyond these numbers? Then we need to consider teaching children about money in an honest way. Starting now.
Want more advice on money, debt, loans, and more? Check out our blog for great information and advice.