Money forms part of our everyday lives and financial literacy gives us the ability to make sound money decisions. The sooner you acquire these skills the better, so start teaching your kids when they’re young.
‘There are different basic concepts and practices that you can teach your kids at different ages that will equip them with the knowledge to make sound financial decisions in the future,’ says Eunice Sibiya, head of FNB Consumer Education.
Children in this age group are too young to understand concepts such as finance, saving and budgeting. But they do understand that you need money to buy things such as ice cream or clothes, and if you don’t have money, you can’t buy things. Explain to your little one that the only way to earn money is to work, and encourage them to think of ways to earn money, like helping with chores. Eunice says, ‘Explain the difference between wants and needs.’
This age group is more aware of money and is more excited to have it in hand so financial education for kids is easier. They might receive money as birthday presents or in the form of pocket money. Parents can teach the principles of saving and money management. They could even have their own bank account, and manage it, to some extent, but only under the guidance of their parents.
Your child can now understand more complex concepts about finance. ‘Teach your children that they need to save a portion of any money they get. When they reach their savings goal, they can be rewarded accordingly. Show them how their money grows when they save,’ says Eunice.
It’s in this age group that children want to take ownership of their money and they want to transact on their own. Chat to your children about the responsibility of having money. ‘Introduce investment concepts and the importance of financial discipline. Children at this age should also be working according to a budget’, says Eunice.
Age 18 and over
At this age your children should be as financially independent as possible.
‘Avoiding the topic of money and financial management will only do your child and yourself a disservice. The best thing you can do for your child is to raise an independent and confident individual who is financially responsible,’ concludes Eunice.