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Raising a CFO: Tips for teaching kids personal finance skills

The one lesson your kids won’t get in the classroom is arguably one of the most important for their future success.

One of the lived-experiences of being a wealth manager is that over your career you get to meet a multitude of eclectic people, in different stages of their financial lives. People from different walks of life, different races, cultures etc… Yet in all this diversity there lies a common theme that binds these people.

My experience has taught me that they share a common complaint, a common grievance. The same grievance that has led them into unsustainable debt. The same grievance that brings on anxiety/panic attacks as they realise their parents will someday be their financial dependents, a role-reversal fashioned years ago in a cauldron made up of improper planning and provision for their retirement.

This same grievance keeps generation after generation poor or just surviving month-to-month. Always one financial crisis from being declared insolvent. What is this common gripe?

Nobody has ever taught me about personal financial management

The one lesson your kids won’t get in the classroom is arguably one of the most important for their future success: how to smartly and responsibly handle money. That is a course we leave to parents, who do not get a lesson plan.

Parents do great teaching kids good manners and how to be safe, make their beds and be culturally savvy, but so very often parents neglect the most important thing of all – to prepare them to be financially astute. Who can blame them? Teaching good money skills can be a blind spot for parents because so many feel financially inept themselves. Parents have this notion that because they are in debt or not saving enough, they have no basis to teach their children about money.

Away from home, we are nurtured in a schooling system that prioritised teaching about photosynthesis over:

  • Budgeting and planning;
  • Credit and debt management;
  • Saving and investing;
  • Taxes and managing a bank account.

We are all aware of this. Most of us suffer and struggle because of this system, yet we are happy to passively allow history to repeat itself by raising financially-illiterate children. Ask yourself what sustainable effort you have made and instilled in your own home to ensure that when your child starts working, they are adequately equipped to structure their first salary, and all future salaries, in a manner that’ll guarantee them not just a comfortable retirement but sustainable financial independence, so that they will structure their salary in a manner that makes talking to them about generational wealth building a reality as opposed to a pipe-dream?

This article is not meant to blame or shame anyone. As the adage goes, “Forgive yourself for not knowing what you didn’t know”. What I hope it’ll do, though, is inspire you to act, speak to a wealth manager and start formulating a comprehensive 60- to 80-year plan that’ll ensure:

  • Your children are financially independent;
  • Your grandchildren are rich and
  • Your great-grandchildren are wealthy.

We need to accept that nobody is coming to save us. If we don’t formulate a plan, nothing will change and our current reality will be our bloodline’s inheritance. Wealth creation is about discipline and time.

The good news is that financial literacy can be learned at any age, but the earlier we start teaching our kids, the better prepared they will be for their adult lives. What lessons did our parents instil in us to help us get a job at a young age? How were we taught to save and spend money wisely? Who helped us open a bank account?

The need for children to receive a basic education in money matters is all too apparent now that the nation is facing what seems like a very uncertain economic future. Not only do children need to understand how the economy works, but – because our current situation came about in large part when many adults did not fully understand how their own salary should be structured over time – young people today need to learn the basics of personal finance.

As a wealth manager and a father of two young daughters, I am frequently asked by other parents for advice on how to teach children the value of a rand. To help you prepare your kids for a financially-sound future, here are my top two tips for teaching children personal finance skills.

Talk to them

Explain why you go to work. Explain that you go to work to make money that pays for the house, the car(s), food and their school fees. When you are out and about with your children, bring their attention to people who are working all around them. Let them know that these people are working and doing their job just like you do when you leave the house in the morning. Children need to understand the tradeoffs of the time needed to earn money and time for having fun.

Once they have a grip on understanding this trade-off, include them in the spending decisions at a young age. Show them that there is a charge to attend their activities and gain their commitment that they attend every class and to try to enjoy it. At the grocery store, let them see the prices for competing items and allow them to select an alternative. Teach them about store brand pricing versus the brand name they see advertised on TV. And talk with them about what ‘on sale’ means, and show them that one-week apples may be a bargain compared with strawberries, but the next week strawberries may be the bargain. 

Afterward, on the way home, make it fun and take them for a treat with the money you saved by being a smart shopper! Or better yet (if possible after ice-cream is an option on the table), ask them if we should save that money and start chipping away at their university funding?

Pay them

Give them a small allowance for household tasks. Young children can complete routine tasks like sorting the clean cutlery, doing chores or putting their toys away. It helps them feel like a part of the team, and paying for their work creates a reward and incentive system. Ask them how they want to spend their money or if they want to add to what is already in their piggy bank – or perhaps they want to help someone less fortunate with a donation?

Watch them smile as they take pride and enjoy whatever decision they make. Paying children an allowance is one of the best ways for them to learn how to handle money on their own. This will also encourage your children to continually plan ahead. It is an opportunity to reflect and to think about the consequences after spending the money: “Am I happy with what I bought? Now I don’t have enough money to buy this other thing. Maybe I should have done something differently.” It gives them practice in making decisions and making choices, and in really experiencing consequences.


Children are naturally impulsive and often do things without thinking about the alternatives, i.e. “Could I have done something else and what would have been the consequences if I did?” The point of facilitating financial reflection is to help kids to learn to think in terms of choices, alternatives and consequences. It’s a skill that is helpful to them their entire lifetime. You can use an allowance to help kids learn to think in terms of choice and to make better decisions.

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