If you don’t teach your kids how to manage money, somebody else will. And that’s not a risk you want to take. We’ll show you how to give your kids the head start you wish you had and set them up to win with money at any age.
1. Use a clear jar to save.
The piggy bank is a great idea, but it doesn’t give kids a visual. When you use a clear jar, they see the money growing. Talk through this with them and make a big deal about it growing.
2. Set an example.
A study found that money habits in children are formed by the time they’re 7 years old. (1) Little eyes are watching you. If you’re slapping down plastic every time you go out to dinner or the grocery store, they’ll eventually notice. Or if you and your spouse are arguing about money, they’ll notice that too. Set a healthy example for them and they’ll be much more likely to follow it when they get older.
3. Show them that stuff costs money.
You’ve got to do more than just say, “That pack of toy cars costs R50, son”. Help them grab a few Rands out of their jar, take it with them to the store, and physically hand the money to the cashier. This simple action will have more impact than a five-minute lecture.
4. Show opportunity cost.
That’s just another way of saying, “If you buy this video game, then you won’t have the money to buy those pair of shoes”. At this age, your kids should be able to weigh decisions and understand the possible outcomes.
5. Give commissions, not allowances.
Don’t just give your kids money for breathing. Pay them commissions based on chores they do around the house like taking out the trash, cleaning their room, or mowing the grass. This concept helps your kids understand that money is earned—it’s not just given to them.
6. Avoid impulsive buys.
“Mom, I just found this cute dress. It’s perfect and I love it! Can we buy it please?” Does this sound familiar? This age group really knows how to capitalize on the impulsive buy—especially when it uses someone else’s money.
Instead of giving in, let your child know they can use their hard-earned commission to pay for it, but encourage your child to wait at least a day before they purchase anything over R200. It will likely still be there tomorrow, and they’ll be able to make that money decision with a level head the next day.
7. Stress the importance of giving.
Once they start making a little money, be sure you teach them about giving. They can pick a church, charity or even someone they know who needs a little help. Eventually, they’ll see how giving doesn’t just affect the people they give to, but the giver as well.
8. Teach them contentment.
Your teen probably spends a good chunk of their time staring at a screen as they scroll through social media. And every second they’re online, they’re seeing the highlight reel of their friends, family and even total strangers. It’s the quickest way to bring on the comparison trap. You may hear things like, “Dad, Sipho’s parents bought him a brand-new car! How come I have to drive this 1993 Subaru?”
Contentment starts in the heart. Let your teen know that their Subaru (although not the newest car on the block) is still running well enough to get them from point A to point B.
9. Give them the responsibility of a bank account.
By the time your kid is a teenager, you should be able to set them up with a simple bank account if you’ve been doing some of the above along the way. This takes money management to the next level, and will (hopefully) prepare them for managing a much heftier account when they get older.
10. Get them saving for university.
There’s no time like the present to have your teen start saving for university. Do they plan on working a summer job? Perfect! Take a portion of that (or more) and toss it in a savings account. Your teen will feel like they have skin in the game as they contribute towards their education.
11. Teach them to steer clear of student loans.
Before your teen ever applies to university, you need to sit down and have the talk—the “how are we going to pay for your studies” talk. Let your teen know that student loans aren’t an option to fund their education. Talk through all the alternatives out there, like going to community college, working part-time while in school, and applying for scholarships now.