Teach your children the necessary financial skills

By Drum Digital
22 July 2014

As a parent you want to protect your children from danger, raise them to be independent and equip them with the tools to succeed in life. Therefor it’s also vital you teach them the necessary skills to handle their finances successfully.

Independent financial adviser Sheldon Loxton believes his most important role as a parent is to provide for his children and guide them to become strong, confident and knowledgeable enough to take on the world on their own. “Our society affords children many opportunities to thrive and reach their potential. However, with all the focus on sporting, cultural and academic achievement, very little focus is placed on exposure to money,” he says.

“The handling of finances is a life skill which every one of us will need to grapple with at some point in our lives to one degree or another and yet in many instances we do very little to help our children master this skill. There are countless stories of highly qualified individuals who have not succeeded due to poor money management.”

What should parents do?

Should you take your children on trips to the bank or lobby for schools to introduce financial literacy as a subject? Loxton believes there’s no substitute for an engaged parent who sees financial education as part of their parenting role. “I see it in my own children. They may not always listen to me but they never fail to replicate my actions.” Here are some of Loxton’s tips:

  • Don’t treat money as a taboo subject in your home Engage in discussions about money with your children. This way instead of just saying “no” or “not now” you provide a platform where they feel comfortable talking to you about finances.
  • Provide opportunities for your children to understand and experience money Children as young as four years old should be allowed to use money without fear. Let them pay for bread and milk at the store or choose a friend’s birthday presents, with a budget. The more mistakes children can make and learn from with small amounts of money at an early age the less chance they’ll have in repeating those errors later on a larger scale.
  • Success doesn’t always lie in how much money you can make; it’s how you use that money that will determine true success.
  • Your child’s future financial success is in your hands This success doesn’t lie in monetary funding but in hands-on parenting which requires leadership and guidance.

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