For many families across SA this year, the usual Christmas splurge won’t be possible, and the thought of gifts might be the last thing on your mind as a parent.
But according to JustMoney a local personal finance website, gifting your kids a small amount of money might mean more than you think and could be the perfect opportunity to teach them important lessons about saving.
After quizzing some local children about what money means to them, they found that many children recognise the importance of money and the value of saving.
Asking the children four financial questions to measure their understanding of the subject, the kids had a few surprising answers. Here’s a look at what they said:
What is money?
Almost all of the children understood that we need money to buy the things we want or need. As five-year-old Imaad and four-year-old Mikail said, we need money to buy food, drinks, and of course ice cream and toys.
Others such as ten-year-old Anru and nine-year-old Racheal understand that money is used to buy a house, pay your bills, and take care of your children.
Why is money important?
Data, transport, fruit, school fees, water, and snacks were some of the items that the kids mentioned.
"Money is important because you use it to pay your school fees, buy food, water, and other important stuff," says Mihle, a nine-year-old.
"You use money to get something that you need, or you’ll probably need in the future, like a house," says Ruvarashe, a nine-year-old. She says money is also used to buy a car.
What is saving?
According to 12-year-old Shasmeen, saving means putting money aside in a deposit account or investment fund. To seven-year-old Jordan, it means putting it in a piggy bank.
Why is it important to save?
Racheal understands that saving will keep her from borrowing. "I can just take out my own money and buy what I want," she says.
"Saving is important so you can do something big that you always wanted to do," says Mkhanyisi, an 11-year-old.
The earlier the better to instil a savings culture
According to Sarah Nicholson, commercial manager at JustMoney, talking to your kids about money is vital. It gives you the opportunity to instil good money habits and a healthy savings culture in your children from a young age.
"This could mean the difference between them growing up to be financially responsible, secure individuals, or individuals who are unable to manage their cost of living," says Nicholson.
So, what to teach your kids about the gifts of money they received at Christmas, here are a few helpful tips.
Hints and tips for parents
The traditional approach is to buy your toddler a money box, so they can see how their money can be saved over time.
Use everyday events
Your shopping trips, your bill payments, games, and books to bring financial concepts to life in a fun and practical way.
Set the example
Show your children what it means to be financially responsible by paying your bills on time, setting aside emergency funds, and saving up for special treats.
Teach your children about budgeting
Help them set goals for the things that they want and tick off financial milestones on the way. If you give your children spending money, or compensate them for chores, this could be deposited into their account and could be saved towards their goals.
Let them save for a major purchase
This will help them to become accustomed to delayed gratification, also helping them understand the difference between needs and wants.
Are cash gifts possible for you this year?
Submitted to Parent24 by JustMoney.
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