4 crucial money lessons parents should teach their children

money lessons

The 12 – 18 march is Global Money Week (GMW). This global campaign is aimed at encouraging children and the youth to learn more about money.

Eunice Sibiya, Head of Consumer Education at FNB says, “The subject of money is universal and applies to all of us irrespective of age and that’s the reason we are fully behind this campaign. We continue to engage young people about the subject of money so that they grow up with a clear understanding of the value of money.”

The long-term benefit of this effort is that we will have a citizenry that understands concepts such as financial planning, budget and saving.

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“The subject of finances has always been thought to be a conversation to be had among adults. However, we are committed to changing this mindset and include children in the conversation,” adds Sibiya.

Sibiya shares tips on how parents can involve their children in the money conversation:

1. Saving vs spending. The discussion about money with children should start by making them understand the difference between saving and spending. Having an understanding of this basic concept will help them value money and be mindful of the favourable financial habits.

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2. Budgeting. The important message is to treat every rand as if it’s your last and to have a clear plan as to how and where you spend your money, and most importantly, how you create room for saving. We encourage parents to help children draw up a budget plan based on their pocket money. This will help create awareness that spending money must be planned.

3. Impulse purchases. Children need to understand the difference between needs and wants. This will help them avoid impulse purchases. Furthermore, parents must educate children about the consequences of unplanned spending.

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4. Financial goals. From the pocket money that your child receives, encourage them to save and set financial goals. Teach them the importance of financial goals and how achieving their goals can benefit them.

“At the heart of this campaign is shaping young minds to understand that if they learn to use money properly, it will open up possibilities for them. While we observe Global Money Week, let it serve as a reminder that if children are not taught to manage money very early, they may never be able to correct themselves and unable to reach financial freedom,” concludes Sibiya.