Money matters with the little ones

Teaching your kids good money habits - the earlier you start a child’s financial education process, the better

Thando Ngubeni

Thando Ngubeni

ASISA Academy IFA Intern. Written under the supervision of a senior advisor.

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Money matters with the little ones

Word on the street is that there is nothing better than leaving your children financially secured after you have gone, but I beg to differ. I believe it's better to leave your children not only financially secured but also financially literate to handle those funds left to them.

Coming from a background where good money habits weren't shown to me is proving to be very disadvantageous because, at the age of 24, I'm finding myself having to break habits I wasn't aware I had. I now realise, to be able to have the lifestyle I want and be able to maintain it 20 or 30 years from now, I need to teach myself the small life lessons that my parents never taught me.

Leaving children with the skills and tools to manage their money wisely and build their legacy should be the ultimate goal for parents. Therefore, incorporating the concept of money into a few daily activities from a young age is a great idea.

Studies have shown that kids as young as three can grasp the concept of "earning" money from doing basic chores such as picking up their toys after playtime. Including a monetary rewards system for good behaviour, and allowing them to use the money earned on something they want, will help instil the importance of money as they grow older.

Encouraging your kids to earn and spend their money will help them see the difference in the value of things. They might not see this early, but as they grow older and get used to the idea of money, this could likely strike up their curiosity for "saving". I remember getting my first piggy bank at the age of six; I was so excited because I thought I'd finally have money. But what I didn't know was that I'd have to earn it and save some to fill up my piggy bank. Parents can also use jars instead of piggy banks, as seeing the jar fill up with money can be an encouraging factor to lead your child to want to learn more about money and how it works.

Today's generation is technology-driven. Opening a bank account for your child and giving them access to their banking app could be a fun learning tool because although they can't physically touch their money, they can see it and watch it grow. And when the time is right, parents can start introducing the beautiful concept of compound interest.

As a young working individual, the first thing I was told was "start saving for retirement" and "have an emergency fund, but also have money to spend". Imagine how much easier it would have been to tackle these tasks had I been given a great foundation to the concept of money. We cannot keep raising a generation that works for retirement. We need children to understand that as much as they need to prepare for their future, they also need to enjoy the present. Instilling these small money habits such as earning, saving, and spending could have a great and lasting impact on your child's life.

We live in a world where money talks, and a child that understands how money works is a child that is well prepared for the future.

As part of our ongoing partnership with ASISA and our investment in their independent financial advisor (IFA) internship programme, Thando Ngubeni, wrote this article under the guidance and supervision of Thulisile Nkomo CFP®, Private Wealth Manager at NFB Private Wealth Management Johannesburg.

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