Ryan Prozesky, CEO of Value Banking Solutions at FNB says it is important for parents to teach kids about money and allow them to manage their own finances as soon as they understand the basics of math.
He shares tips on how parents can start teaching their kids about managing and saving their money:
Importance of saving
Encourage your children to plan ahead and save money to achieve their desired goals. Putting money away for them and allowing them to watch their money grow will teach them to be more patient and disciplined with their money.
A kids’ banking account is a great tool which can be used by children for monitoring, managing and saving their money. Having their own bank account will teach them the responsibility of managing their own finances. Enabling children to see their money via digital platforms is a fun and interactive way to educate children about managing their money, while also being safe and convenient for both parent and child.
Budgeting and spending
Assist them in drawing up a budget each month and let them take control of their spending. For example, allow them to allocate a budget for necessities like school stationary, savings and pocket money. Whenever possible, go shopping with them and guide them when necessary.
It is never too early to teach your children the principle of “paying themselves first”, by first allocating any pocket money to their budgeted savings before spending, and not only saving if there is anything left over after their monthly spending.
Be mindful not to give your children too much pocket money without them putting in an effort to get it. Ask your children to help out with house chores and reward them based on their contribution. This will help them to appreciate the value of money.
For example, for extra pocket money - ask them to help with washing dishes after dinner or your car over the weekend. This will teach them discipline and make them understand that money is earned.
“Don’t wait until your kids start high school to teach them about the principles of money management. The journey to financial freedom should be cemented from a young age,” concludes Prozesky.