TEACHING YOUR CHILD GOOD MONEY MANAGEMENT SKILLS

THIS CHILD’S MONTH, TAKE SOME TIME TO TEACH YOUR CHILDREN ABOUT SAVINGS AND INVESTMENTS WHICH WILL HELP TO ENSURE THAT THEY DEVELOP GOOD MONEY MANAGEMENT SKILLS. LESSONS TAUGHT AT AN EARLY AGE ARE LESS LIKELY TO BE FORGOTTEN. TO ASSIST YOU WITH THIS HERE ARE SOME POINTERS FROM THE CONSUMER AFFAIRS COMMISSION TO ASSIST YOU WITH THIS CHALLENGING TASK.

Make saving fun

USE:

BRIGHT COLOUR SAVING PANS
TODDLERS ARE ATTRACTED TO BRIGHT COLOURS AND SHINY OBJECTS, SO TAKE ADVANTAGE OF THIS. PURCHASE A PIGGY BANK OR SAVING PANS THAT LOOKS LIKE A BALL OR A CARTOON CHARACTER AND HAS VIBRANT COLOURS. NEXT, GIVE THEM YOUR SPARE CHANGE TO DROP INTO THESE SAVING PANS. YOU MAY SOON FIND YOU WON’T HAVE ANY CHANGE AT HOME AS ALL OF IT WILL BE IN YOUR CHILD’S SAVING PAN.

MONEY GAMES
ENCOURAGE YOUR CHILD TO PLAY GAMES THAT HELP THEM TO DEVELOP MONEY MANAGEMENT SKILLS SUCH AS, MONOPOLY. IF YOU CAN’T FIND ONE THAT SUITS YOUR CHILD’S NEEDS THEN CREATE YOUR OWN.

Let them see it grow

A. START A BANK ACCOUNT
WHEN THE PIGGY BANK GETS HEAVY AND NEEDS TO BE EMPTIED, TAKE YOUR CHILD TO A BANK AND OPEN A CHILDS SAVING ACCOUNT. CHILDREN ACCOUNTS OFFER MANY INCENTIVES AND SOMETIMES BETTER RATES OF RETURN. INTRODUCE YOUR CHILD TO A CLIENT CARE OFFICER AND ENCOURAGE THEM TO SPEAK TO THIS OFFICER AND VISIT THE BANK TO MAKE DEPOSITS REGULARLY. YOU MIGHT NOT THINK MUCH OF THIS BUT IT WILL CREATE A LONG LASTING RELATIONSHIP WITH YOUR CHILD AND A BANK THAT MAY BENEFIT THEM IN THE FUTURE.

B. INVEST
WHEN THEIR SAVINGS BEGIN TO GROW, TAKE THE TIME TO HELP YOUR CHILD SEE HOW MUCH WAS INVESTED AND HOW MUCH THEY NOW HAVE AS A RESULT OF CONSISTENT SAVINGS. WHEN THE SUM IN THE SAVING ACCOUNT GROWS, SPEAK TO YOUR CHILD ABOUT INVESTMENT OPTIONS EG. MONEY MARKET FUNDS AND STOCKS, IF YOU DON’T BELIEVE YOU ARE CAPABLE OF DOING THIS, ASK YOUR CHILD’S CLIENT CARE REPRESENTATIVE TO DO SO.

C. SET OBJECTIVES
HELP YOUR CHILD TO PLAN AHEAD AND SET GOALS. THESE GOALS CAN BE AS SIMPLE AS BUYING A BOOK TO LARGER GOALS LIKE BUYING A BICYCLE.

Offer immediate rewards

D. MULTIPLY THEIR SAVINGS
CHILDREN NEED IMMEDIATE GRATIFICATION, SO MAKE A DEAL WITH YOUR CHILD TO ADD TO THEIR SAVINGS. YOU COULD AGREE TO DOUBLING WHATEVER THEY SAVE OR CONTRIBUTE A PORTION, SAY AT LEAST $10 FOR EVERY $1000 THEY SAVE.

E. GIVE THEM A TREAT
IF ADDING TO THEIR SAVINGS WILL LAND YOU IN BANKRUPTCY, THEN SIMPLY OPT TO TREAT THEM EVERY TIME THEY MEET AN AGREED OBJECTIVE.

Teach them the value

F. TAKE THEM SHOPPING AND LET THEM SEE HOW MUCH THE ITEMS YOU BUY FOR THEM REALLY COST.
FOR THIS PURPOSE, GIVE THEM A SMALL ALLOWANCE AND LET THEM BUY ITEMS THEY NEED FROM IT. THIS WILL HELP THEM TO LEARN HOW TO PRIORITISE.

Give them an allowance

AS YOUR CHILD GETS OLDER, YOU WILL FIND THAT SPARE CHANGE IS NOT ENOUGH. GIVE THEM A WEEKLY ALLOWANCE FROM WHICH TO SAVE AND BUY ITEMS YOU BOTH DEEM NECESSARY.

Encourage entrepreneurship

IF YOUR CHILD NEEDS MORE MONEY THAN YOU HAVE ALLOTED IN THEIR ALLOAWANCE, LET THEM WORK FOR THE EXTRA. HELP THEM TO COME UP WITH IDEAS SUCH AS, WASHING YOUR CAR.

Teach them consequences

G. LET THEM MANAGE THEIR LUNCH MONEY
GIVE THEM THEIR LUNCH MONEY IN BULK FOR A PARTICULAR PERIOD, EG. 2 DAYS, A WEEK OR EVEN A MONTH, START OFF WITH SMALL TIME PERIODS. IF THEY MIS-MANAGE THEIR LUNCH MONEY AND RUN OUT BEFORE THEIR NEXT ALLOTMENT, THEN LET THEM WORK HARD FOR EXTRA, MAKE THEIR LUNCH OR TAKE A LOAN FROM YOU FOR THE BALANCE. THE POINT IS, YOU MUST LET THEM LEARN THAT THERE ARE CONSEQUENCES FOR EVERY ACTION. YOU KNOW YOUR CHILD SO YOU DECIDE ON THE BEST PUNISHMENT AND REWARD.

AVOID THE TEMPTATION OF FREQUENTLY BORROWING OR DIPPING INTO YOUR CHILD’S SAVINGS. IF YOU ASK AND THEY AGREE, PAY IT BACK AS YOU AGREED AND WITH INTEREST. TEACH THEM GOOD MONEY MANAGEMENT SKILLS BY YOUR EXAMPLE.