RANDS & SENSE

Your attitude towards money sets the tone for how your child will relate to it. Raise a money-savvy child with a strong financial future.

We should all learn 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’re 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 financial savvy, almost as if there’s something unsavoury 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 to ensure they grow up with a sensible attitude to it. Good habits – and bad – come from parents. The financial habits we acquire and lessons we learn in the 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 that you are your child’s greatest role model. 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.

Parents sometimes keep children busy with “stuff” and outings and extramurals, but you don’t always have to do that. Think about having hobbies at home that also give you family time together. It’s a back-to-basics approach that will teach your children that you don’t have to spend 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. It’s 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.