{"id":232525,"date":"2020-02-23T07:00:38","date_gmt":"2020-02-23T05:00:38","guid":{"rendered":"https:\/\/germistoncitynews.co.za\/?p=232525"},"modified":"2020-02-22T21:43:47","modified_gmt":"2020-02-22T19:43:47","slug":"raising-financially-responsible-children","status":"publish","type":"post","link":"https:\/\/develop.citizen.co.za\/germiston-city-news\/news-headlines\/2020\/02\/23\/raising-financially-responsible-children\/","title":{"rendered":"Raising financially responsible children"},"content":{"rendered":"

Most parents will agree that teaching children about money is important, but there\u2019s more to it than telling them that saving is good or to be careful of debt.<\/p>\n

Marlies Kappers, a mother and head of marketing at financial services provider, DirectAxis, explained while explaining concepts such as budgeting, saving and lending will give children an understanding of how money works this must be backed by practical experience.<\/p>

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\u201cThe earlier children can start learning about money the better but be careful not to scare or stress them,\u201d she said.<\/p>\n

\u201cAlso remember that every child is different, so consider the most suitable approach.\u201d<\/p>

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Children respond to what they see and hear around them, so they\u2019re more likely to understand if you explain how the household budget works.<\/p>\n

The conversation may go something like this: When mom and dad are paid, they first pay the bills, such as school fees.<\/p>\n

Then they buy groceries.<\/p>\n

This is because grocery bills can differ depending on what\u2019s needed and how much money there is to spend.<\/p>\n

Some of what\u2019s left is goes towards savings and any extra can be used for doing fun things, although having fun doesn\u2019t need to cost anything.<\/p>\n

ALSO READ: Encourage your children to start saving early<\/a><\/strong><\/h4>\n

\u201cIt\u2019s simple but it gives children an understanding of how to manage money using examples that are familiar,\u201d she said.<\/p>\n

\u201cThere\u2019s far more chance they\u2019re going to grasp this than abstract explanations.\u201d<\/p>\n

Practical experience helps to drive the lessons home.<\/p>\n

When they earn pocket money for household chores, help them work out a similar budget.<\/p>\n

First, they\u2019ll need to pay the bills, perhaps by contributing to a pet\u2019s upkeep or paying for airtime.<\/p>\n

Take them shopping when you\u2019re buying groceries.<\/p>\n

Inevitably they\u2019ll want something that\u2019s not on your list and that might be their grocery spend.<\/p>\n

Remind them not to spend all their money because they still need to save some.<\/p>\n

Then, if there\u2019s any left over they can have some fun, go to a movie or treat themselves.<\/p>\n

\u201cThis first-hand experience is invaluable in teaching them how to practically apply what you\u2019ve explained,\u201d said Kappers<\/p>\n

\u201cIt\u2019s also a good idea to let younger children handle cash, under your supervision.<\/p>\n

\u201cPhysically handing over hard-earned pocket money and counting the change will make them more confident about handling money and think a little harder about their purchasing decisions.<\/p>\n

\u201cOf course, it\u2019s sensible and safer to get older children, who\u2019ll be handling larger amounts, debit cards.<\/p>\n

\u201cHopefully by then the concept of budgeting and thinking about how they\u2019re spending their money will be ingrained and they\u2019ll be less likely to tap-and-go on a whim.<\/p>\n

\u201cIt\u2019ll also teach them how to manage a bank account.\u201d<\/p>\n

Some banks, such as FNB, offer no-fee transactional banking accounts for children.<\/p>\n

As a parent, teaching children about money isn\u2019t something that you ever stop doing.<\/p>\n

As they grow up their earning potential grows.<\/p>\n

They may graduate from doing household chores to getting a casual job.<\/p>\n

Typically, their expenses also increase.<\/p>\n

They may want to buy sporting equipment, a scooter or motorbike to get around or even save towards a car.<\/p>\n

ALSO READ:<\/strong>\u00a0Understanding the importance of setting up a trust<\/a><\/h4>\n

At some point they\u2019ll probably ask to borrow money.<\/p>\n

When they do, set a goal in terms of what they need to earn before you\u2019ll match them or lend them the remainder.<\/p>\n

Work out a reasonable period for the loan and a repayment schedule and charge them moderate interest.<\/p>\n

Explain there will be penalties if they miss payments and that you\u2019ll also be less likely to lend them money in future.<\/p>\n

While they may not immediately appreciate it, you\u2019re teaching them the benefits of paying what they owe on time as well as how interest works.<\/p>\n

As they get older you can use a similar approach to teach them about the difference between good credit, such as loans to fund tertiary studies or start a business and borrowing money to fund an unaffordable lifestyle.<\/p>\n

Perhaps the most important lesson of all is to remember that as a parent you\u2019re a role model.<\/p>\n

\u201cIf you\u2019ve heard your child use a grown-up word or expression they didn\u2019t learn in school, you\u2019ll know they soak up everything around them,\u201d said Kappers<\/p>\n

\u201cThe same applies to how they learn about money.<\/p>\n

\u201cRemember that and the influence you have not just in terms of what you teach them but your own financial behaviour.\u201d<\/p>\n

Hav<\/strong>e a story?<\/strong><\/p>\n

Contact the newsroom by emailing: Melissa Hart (Editor)\u00a0<\/span>germistoncitynews@caxton.co.za<\/a>\u00a0<\/strong>or Leigh Hodgson (News Editor)\u00a0<\/span>leighh@caxton.co.za.<\/a><\/strong><\/p>\n

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