Your kids about money

CityPress - - Business - FI­NAN­CIAL

We of­ten hear that South Africa has a poor sav­ings cul­ture, but this is not nec­es­sar­ily the case, says John Manyike, the head of fi­nan­cial ed­u­ca­tion at Old Mu­tual. Manyike points out that with an es­ti­mated R44 bil­lion flow­ing through the in­for­mal sec­tor via stokvels and sim­i­lar sav­ings ve­hi­cles, the is­sue is not that South Africa has a poor sav­ings cul­ture, but rather that it has a poor long-term sav­ings cul­ture.

“South Africans save to con­sume in the short term. How­ever, when we talk about ed­u­cat­ing our youth in terms of fi­nan­cial lit­er­acy, we need to ed­u­cate the adult pop­u­la­tion as well. The ap­ple doesn’t fall far from the tree and chil­dren need to see their par­ents ex­hibit key sav­ings be­hav­iour so that they em­u­late this in their own fi­nan­cial habits,” he says.

Start the con­ver­sa­tion at home

Manyike says you can start small by teach­ing your chil­dren the im­por­tance of sav­ing. For ex­am­ple, you could ex­plain how much money the fam­ily saves by eat­ing in in­stead of go­ing out to a restau­rant, or by cook­ing a meal from scratch rather than buy­ing a ready-made meal.

“Money is of­ten a taboo topic, even among adults. As a par­ent, you don’t have to go into the de­tails, but share with your chil­dren your thoughts around sav­ing and plan­ning for the fu­ture, and then let them see you im­ple­ment those plans.

“For ex­am­ple, one great way to make it prac­ti­cal and tan­gi­ble is to have a fam­ily dis­cus­sion to plan a big hol­i­day that will take place in a year’s time. Dis­cuss where you want to go, how long you want to be away for and what you want to do when you get there. Then talk about how much you will need to save and how the fam­ily can go about work­ing to­wards this medi­umterm sav­ings goal,” he says.

Manyike points out that we are in the mid­dle of win­ter, so you could talk to your chil­dren about the im­por­tance of keep­ing the elec­tric­ity bill down by adopt­ing ef­fi­cient be­hav­iour habits such as: Switch­ing the lights off when­ever you leave a room; Keep­ing the heaters on for a lim­ited pe­riod each day in­stead of leav­ing them on all day; Us­ing blan­kets rather than heaters; and Fill­ing the ket­tle with only the amount of wa­ter you need to boil to make one cup of tea, for ex­am­ple. “Chil­dren learn by ob­ser­va­tion, par­tic­u­larly when it comes to their par­ents. You can’t have an at­ti­tude of ‘do as I say, not as I do’. “If you have more than one child, you could en­cour­age them to save by get­ting them to cre­ate a pic­ture board of some­thing they have iden­ti­fied as a sav­ings goal. “It could be any­thing from a ma­tric dance dress to a bi­cy­cle. The child who saves more each month could be re­warded by your match­ing their sav­ings for the month,” he sug­gests.

The con­ver­sa­tion con­tin­ues at school

Manyike says that at a re­cent fi­nan­cial lit­er­acy con­fer­ence he at­tended in Am­s­ter­dam, the Or­gan­i­sa­tion for Eco­nomic Co­op­er­a­tion and De­vel­op­ment listed the fol­low­ing guide­lines for in­te­grat­ing fi­nan­cial lit­er­acy into the school cur­ricu­lum:

There must be a co­or­di­nated na­tional fi­nan­cial strat­egy with one clear leader.

Sus­tain­able fund­ing is a must. Pub­lic-pri­vate part­ner­ships are the way for­ward. For ex­am­ple, in South Africa, fi­nan­cial ser­vices com­pa­nies each have their own pro­gramme/fi­nan­cial lit­er­acy drive, but if th­ese projects were all co­or­di­nated un­der one clear leader with fund­ing from the pri­vate sec­tor, so much more could be achieved, and faster.

Ad­e­quate train­ing for teach­ers. Just as par­ents need to be fi­nan­cially ed­u­cated, so too should teach­ers, so that they are in a po­si­tion to pass their knowl­edge on to our youth.

The pro­vi­sion of ef­fec­tive learn­ing tools. Manyike says this point puts the ball back in the par­ents’ court: “Chil­dren to­day are so tech savvy. We need to har­ness that skill when it comes to us­ing tech­nol­ogy to drive fi­nan­cial lit­er­acy ed­u­ca­tion.”

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