How to raise financially responsible kids

Learning to save and to master the art of delayed gratification are keys to building wealth – and the sooner you learn, the better you’ll be at it. Here are some tips for raising financially responsible children: Let them earn their own

money: Whether it is in the form of a regular allowance or pocket money, reward your child for chores done around the house. Learning to appreciate the link between effort and reward is important because there is no “free lunch” in the real world.

Give them savings jars: Or better still, get them to make their own savings jars by recycling glass bottles or plastic containers and labelling them Save, Spend and Give. Discuss and agree on what proportion of their allowance will be spent on each. These three aspects form the foundation of responsible money management. Have healthy money conversations: The way you speak about money will impact your child’s future relationship with it, so be sure to phrase every conversation positively.

“Money doesn’t grow on trees” is patronising and does little to explain where money does come from. Speak positively about money as a tool that can be used for good.

Teach them where money comes from: Explain to them where the family’s money comes from and how you earn it. Help them understand that you are able to use your special skills to make money and that it’s used to provide for the family. Take them to the bank:

Expose your child to the concept of a bank as soon as they are able to understand so they can appreciate the importance of keeping money in a safe place.

Open a bank account: Once your child is old enough, set up a bank account for them which ideally has online access. Log on regularly so they can learn to appreciate that online money is still real money.

Be their creditor: If your child has grasped the concept of interest, allow them to borrow money from you to make a large purchase. Insist that they pay you back over an agreed period of time and include a penalty if they make a late payment.

Encourage them to apply for scholarships and bursaries: Whether or not you are able to afford their tertiary education, encourage your child to apply for their own bursaries and scholarships.

Let your children learn the value of how to market themselves and how their hard work can be rewarded.