It is essential for youngsters to be taught from an early age how to work with money and become aware of what the savings process entails. This will enable them to manage their financial situations effectively. And, their behaviour also contributes inherently to the well-being and future of our national economy.
DebtSafe encourages South Africans this July (National Savings Month) to help teach children how to apply saving principles and work ‘smart’ with their money.
Here helpful tips that can assist parents/guardians with their essential (and inevitable) task:
Initiate open communication
The ideal way to get children into saving/being aware of money is to talk to them about it and explain its responsibility. Parents, grandparents or guardians can have regular conversations with children and this, of course, includes an open communication process. Sit around the dining room table and point out situations – talk about the shopping list for the month, future holidays and the costs involved and let them think about what was said and shared during the money conversation. Parents can also, for example, refer to the importance of money when it comes to those household chores that need to be done – a specific task for a certain amount of pocket money each month/week. Emphasise why it is essential and what the saving and ‘win’ behind the task and concept entails.
Make the concept tangible
A concrete concept of money and how to become savvy savers need to be portrayed to kids. Young children need to touch and see the money that they save physically. This makes it easier to ‘feel’ its loss when it is gone. However, the swipe of a bank card is not the ideal way to start teaching children how to save and take responsibility for finances. Piggy banks or savings jars will then come in handy for younger kids. Let them make a jar for each saving goal, for holidays and special events like birthdays or Christmas. It is also good to open up a savings account when the children get older. It is a good indicator for your kids to know they have shown progress in their saving skills and have taken an advanced step toward becoming savvy money stewards.
Achieve goals – draw up a ‘savings chart’
Parents/Guardians can encourage children and assist them in making their money savings chart. This chart needs to include a timeline that demonstrates how many weeks/months it will take to save for a particular savings goal. Let them make it beautiful according to their taste and preference – use stickers or magnets and let them take ownership of what it looks like and the update thereof/keeping it updated. Also, offer a reward when they have reached a (short-term) savings goal.
Parents/guardians: ‘practice what you preach’
What good does it do if adults tell kids to be prudent in their money spending and proactive in saving when they never show any sign of it or set an example of the principle thereof? Parents/guardians can lead by example and have their own savings jar to put money in regularly or explain the process via illustrations to their kids that they also set up and achieve their goals. In each action, children can learn about money during shopping trips. For example, point out what prices they need to look out for or during holidays: how to stay within budget – explain the importance of sticking to a holiday budget and what it involves.
Some say it is never too late to save or learn about money and what it entails but I want to highlight that starting sooner rather than later is better. Kids can be ‘money educated’ from a young age to become part of a savvy savers generation and offered the opportunity to become financially successful individuals. Parents, guardians, grandparents, aunts, uncles and teachers can raise awareness about money and the concept of saving by teaching the necessary skills needed. It is not only a victorious situation for the children and their future decision-making but also a win for South Africa’s economy and prosperity.
Carla Oberholzer is debt advisor at DebtSafe.