Raise a millionaire

Raise a money-savvy child with a strong financial future

THE RECENT FINANCIAL recession has taught us a few simple lessons about money: It’s finite!

If you borrow, you’ll have to pay it back. There’s no such thing as a sure bet. If you can’t afford it, you might be better off not buying it!

When you put it that way, these are lessons that young children could learn – and benefit from. Many of us feel conflicted about teaching our children to be financially savvy, almost as if there’s something unsavory about talking about money with or in front of the children.

If you feel that way, chances are you were brought up in a family that considered money not a conversation for polite company. But there are sound reasons to talk to your children about money says Vicky Dyason, director of Financial Fitness Services, a Sandtonbased company that advises clients on their financial needs and behaviour.

“I see people in their 20s who are very financially astute, with a sensible attitude to money, and without exception they got their good habits from their parents when they were children and teenagers. But I also see a generation that is very heavily in debt. They generally get that from their parents too,” she says.

The financial habits we acquire and lessons we learn in our birth family are the basis for financial behaviour later in life. Just as we try to teach our children good eating habits, good dental hygiene or appropriate social skills, so

should we teach them how to look after their money. Don’t burden children with adult concerns, but do introduce the fundamentals that will be built on throughout childhood. Educating and motivating children to become smart consumers and good investors will empower them throughout their lives.

If you plan to teach your child some financial sense, start by thinking about your own attitude to money and your money habits (good and bad!) Remember you’re your child’s greatest role model when it comes to money, says Vicky.

“If he sees you pull out a credit card every time you want something, he learns instant gratification. If you tell him that you will be saving up for four months to buy a particular item, you teach him about saving.”

She warns: “Parents sometimes keep children busy with ‘stuff’, extramural activities and outings, but you don’t always have to do that. Think about having hobbies at home, which also give you family time together. It’s a backto-basics approach that will teach your children that you don’t have to spend money to have fun.”

Another piece of advice is to start an investment in your child’s name from the time he’s a little baby. Vicky says this is a lesson, as well as an investment.

“Show your older child or teen the statements, explain how you started early so that it would add up to enough money for him to go to university. You are setting an example.”

GAMES AND EXERCISES

Children as young as two or three years old will enjoy feeding coins into the slot of a piggy bank. Try to find a see-through one so that your little one can see it filling up with coins. Even a jar will do. For littlies, give your child your loose change. When your child is three or four, give him a fixed amount, say a R2 coin every Saturday. Let him know that when the piggy bank is full, he can decide what to buy with it. It’s a first lesson in saving and it’s great for hand-eye coordination too.

KNOW THE COINS

Your preschooler will be interested in the different sizes and colours of the various denominations. Tip out your change purse and look at the different coins. (Wash the coins first, and your child’s hands when the game is finished).

Here are some games and lessons that use coins – introduce them when they are age-appropriate: ✓ Point out how the number of rands or cents is imprinted on each coin. Talk about which are worth more and which are worth less. ✓ Look at which coins are bigger and which are smaller. Play a sorting game where your child has to put them in size order. Older kids can put them in order of value. ✓ Do coin rubbings by placing a piece of paper over the coin and rubbing gently with the side of a wax crayon until an image appears. ✓ Play shop – a play cash register with pretend money is a toy that gives hours of entertainment and is useful in learning about money. Setting up shop is a fun activity all on its own – choosing merchandise, making price stickers, arranging the stock. Take turns to be shopkeeper and customer. The customer gets a certain amount of money to buy whatever she can afford. The shopkeeper has to tally up the shopping and give change. This game can be adjusted to suit the age of the child. In the beginning, each item might be R1. As she gets more proficient at adding, prices can be R2. For older kids, you might have price tags of R3.50 or R11 giving them a stab at more complex addition and subtraction. Great for maths skills too!