As a nation, South Africans are not good at saving. Most households spend all they earn, or worse they spend more than they earn. Parents have a chance to change this cycle and teach their kids the benefit of savings from an early age.
Kids have no concept of the value of money and they believe that ATMs are there to supply endless wads of cash, and the money from this -magic money machine’ should be used to buy tons of non-essential goodies.
How to teach a child the value of money and how to save for a rainy day:
- Pocket money – instead of buying a child sweets, toys, etc., give them a weekly allowance. Let the child purchase their own treats. The money given should be age-appropriate and preschoolers should be given around R10 week. Explain that if they save their weekly allowance, they will be able to buy bigger and better treats or even toys the next week. Other than encouraging saving, receiving weekly pocket money will let kids feel important.
- Earning money! Give kids a list of chores and pay them per each completed chore. The amount can be small and the chore can be simple. Parents should not expect each chore to be completed perfectly.
- When kids want a special, expensive toy or game, encourage them to save their pocket money or earned money. Draw up a fun savings chart to show them how much money they will need. Kids will be taught to work towards a goal.
- Open a bank account for the child and teach older kids how to use the ATM. This will also boost the child’s confidence.
- Don’t give into your child’s every whim! When out shopping do not buy everything your child wants. As kids grow their demands will grow too and pleasing a three year old is a lot easier than trying to keep a teen happy! Stick to your guns and say no!
We are in the mindset of instant gratification and if kids are not taught to how to save, they too will grow up with the mindset that their needs and wants should be met instantly. When kids are taught how to save, and are shown the benefits of savings, parents are teaching their kids a valuable life-lesson.
Other than teaching kids the value of money – it is also important for kids to understand that money is not everything and since charity begins at home, it may be a nice idea to encourage kids to use their some of their saved pennies for those less fortunate!