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Mom’s influence on child’s relationship with money

Empower your child's money relationship: Start early, teach budgeting, guide decisions, and foster savings.

As a mother you can influence your child’s relationship with money by starting early and demonstrating where money comes from, ways to create a budget, how to make sensible financial decisions, and how to establish savings objectives.

Ideally, you need to provide a strong foundation for your children from the onset which will help them build better relationship with money which will in turn help them to manage their finances efficiently.

Ilse Smuts, Product Growth Head, FNB Cash Investments says, “Given the tough economic environment that we are living in, we need to understand the importance of teaching children about finances from a young age. There is a common assumption that you need to be an expert in finances to teach your children about money, but that is far from the truth. And there’s no best time to strike up a conversation about money as it’s ongoing and you learn about money/finances along your journey,”

Research shows that kids begin to develop attitudes and habits regarding money around the age of five, so starting to teach them about it at the age of three or four is a good idea and should continue up until they are in their teens and preparing them to make some independent financial decisions by the age of 18.

Raising children is very rewarding but it does come with its fair share of challenges. “I am motivated by a proverb that ‘Train a child the way he should go and make sure you also go the same way’. This is the cornerstone to enjoying parenthood and the reason that I have become intentional about what I teach my child including their behaviour with money”, says Aneesa Razack, CEO of FNB Fiduciary.

Razack recommends the simple habits below to help drive your child’s behaviour with money, adding a bit of fun and creativity along the way. “Being creative in your money management lessons will help in driving the importance of money to your kids and this will also help them remember in years to come,” says Razack.

Razack and Smuts highlight some of the best practices when teaching children to manage money:

Talk to your children about money

This is the first step in helping your children understand the concept of money or money management. Use practical day-to-day scenarios and try not to overwhelm them with information.


Show your children how to map out a budget

Involve your children when you put the monthly family budget together. A great start is to help your children track where their money is going, is by having an up-to-date budget.

Your children’s budget should include their savings, expenses and those events that they enjoy doing like going to the movies, purchasing toys, books etc.  This will be their ultimate blueprint which will help guide you through each month and year. Through this process you can help teach your children the difference between needs vs wants and responsibilities


Make savings a family project

One of the easiest ways to get the savings project started is with their pocket money or their monthly spend allowance – if your budget allows. Set goals and encourage each family member to save up for your family project – such as a Mother’s Day, Father’s Day, or birthday gift for your siblings.

Savings don’t have to be for something specific all the time. You can even save and contribute towards a winter soup drive for the disadvantaged. This is also a great time as it allows everyone to bond as a family; whilst learning about the value of spending money wisely.


Help your children open a bank account or an investment account

Encourage your children to put their money into a savings account. You can help your child or teenager track and make sure their money is safe and they’ll learn about the power of compound interest (earning interest on interest), when it comes to growing their money.

Another worthwhile recommendation is to get your teenager exposed to start investing in Unit Trusts, Exchange Traded Notes or shares for as little as R10 from global brands such as Apple, Amazon, Facebook, Microsoft, Alphabet (Google), Netflix, Tesla, Coca Cola, and McDonalds – which they can acquaint with a young age for their long-term goals.

The tax-free savings account is a very powerful investment vehicle that as a mother you can get for your child as it can supplement his/her retirement and with a sizable tax-free investment portfolio available to the kids once they turn 18 years old, you can offer your children a head-start in life.


Instill a habit for savings and reward

Kids receive pocket money, which they typically use for entertainment and snacks. It’s critical to instill in children the idea that money must be earned and isn’t only for spending – one must save.

Get your kids involved in household chores like dishwashing and give them rewards based on how well they perform. This will encourage children to value money and use it wisely.

“Additionally, as children imitate what their elders do, it is important for mothers to be wise with money management in front of their children so that they can learn the greatest money skills from you. Kids will benefit from knowing that one needs to make priorities while spending money and that one should set goals.,” Smuts adds.

Every mother wants to see their children happy, and the best gift a parent can give their children is to start teaching them about money management as early as possible. This will prepare their children to be financially independent and wise adults when they grow up.


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