Equipping your kids with the financial tools from a young age sets them up for future financial success. Mom of three and CEO of Money Savvy Brands, Kathryn Main shares her insight.
As a parent, you want your kids to thrive in key aspects of their lives. And as you watch them become more independent with each milestone, you might be wondering about the right time to start talking to your kids about money. Kathryn says the time is now, “in the digital age we live in, don't allow your kids mindsets about money, to be influenced by social media influencers and their friends,” she cautions, and affirms that you have the opportunity to be a positive example and trusted guide when it comes to finances. Kathryn asserts that our personal financial situations and how we deal with this are all life lessons we are teaching our kids even if we are not communicating it to them verbally. Here, she shares practical ways to teach your kids about money.
Get them involved…
The best way to teach kids about money is to show them now what is happening in the world and to your expenses. Experience and knowledge are the best tools you can give your kids to equip them for an uncertain future. Make your financial situation a family affair. With less cash coming into the household it's wise to relook your budgets. One of the best ways to cut back is to look at your variable expenses and see where you can save some ZAR’s. Get the kids to help you work on the budget. This is a great time to talk to them about what expenses are and the differences between fixed and variable expenses. Talk to them about what your options are for cutting expenses and let them get involved in the process. Challenge them to find the best insurance deals for you online or to try and save R1000 on your food budget by planning your meals and shopping list.
Have honest conversations…
Talk to your kids openly about reworking the family budget and encourage them to be part of the conversation. See what sacrifices they are willing to make for the greater good of the family.Start talking to them about your family values and how values drive behaviour. Set some financial goals as a family and put an action plan in place to meet these goals. When they are adults setting financial goals for themselves will come naturally.
Teach them to be independent and self-sustainable…
Show them how the economy has impacted your investments, explain to them why the Rand is weakening, encourage them now to start thinking of ways to create an income for themselves. In hard times come many opportunities. Start asking your kids to come up with solutions to solve real problems you and people you know are facing right now. Now is a good time to start introducing new concepts to kids. Kids are online and have more time to learn new skills. Teaching them to think about how they can create their own income streams is key to setting them up for success in the future. Gone are the days when we can rely on one source of income. Equipping them now to have a side hustle and teaching them how to manage that income are key.
Introduce the concept of passive income…
Use online sites like www.easyequities.co.za to teach them how to invest and save that money into a tax-free savings account. Now more than ever, one important concept we should be teaching our kids is the concept of saving and why we save. In this crisis those that did not have savings will have felt the financial pinch more than those who did. Encourage them to start saving a minimum of 15% of everything they earn from their side hustle. Take them into the bank and open a bank account for them with a saving pocket and set up an automatic transfer to save that money. Teaching them to “Pay themselves first” is one of the most valuable lessons you can give them.
For more information, visit moneysavvykids.co.za
