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It all starts with a piggy bank

Teach your kids about money management

As parents you teach your children many things — to read, to write, to speak, to eat right, to behave — the list can be endless. It is a huge responsibility to mould a child into a responsible adult of tomorrow. Learning to use money well is a vital skill that your child needs to learn and this is something he can do, right from an early age.

Spending and saving can be taught from a young age. Show them how to balance the two.

Here are some easy ways to teach your children how to manage money

Let them watch you do it first!

A child learns best by imitation — so it is a great idea to allow your child to see you budget, comparison shop and save. Take them along when you go to the bank to deposit your savings in a Savings Account.

Explain to them what you are doing while you are doing it. Include them when you make your weekly grocery list and budget. Let them see you turn off lights and fans as you leave a room.

Give them some pocket money!

Start small. And guide them as they start handling money. Give them piggy banks or cute colourful 'safe' containers to keep their money in. Start by giving them small amounts each week, and gradually make this a fortnightly exercise or even a monthly one. Open bank accounts for them, and encourage them to save. If they are old enough to understand, you could explain to them how interest accumulates, and their money grows, over time. It is important that you not bail them out if they use up their money too quickly. Let them experience the consequences of their actions.

Don't buy everything your child asks for.

Learn to say NO! It might be heart breaking to do that — but you will be teaching them important lessons about budgeting and using their money well. If they're used to getting everything they want, they'll never understand how to prioritise, which is what budgeting is all about. Give them a little notebook to write their expenses in. And let them watch you write down what you spend everyday first! Review their spending with them regularly.

Remember, that the older the child gets, the bigger the mistakes will be. The sooner he or she starts learning from their mistakes, the better. And make up your own rules as you go along — if one doesn't work, try another. Not every child learns the same way.

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The content provided in this section is for general information purposes only and does not constitute financial advice or any other kind of advice. You must obtain specific advice about your specific circumstances from your own financial advisor and/or other advisors.

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