I have a total of 5 nieces and nephews (combined), they are all over the age of 6 years. And as a doting aunt – I find myself handing out the occasional R5 or R10 here and there. I am also a mother to a 3 year old; who has many, many questions for me nowadays – none pertaining to pocket money – as yet – thankfully. 🙂
This donation from me (R5 or R10) quickly disappears, and before you know it – they are back for more. I’ve also noted how bitterly disappointed they are to discover how quickly money disappear. This certainly got me thinking. This is where early advice and guidance about smart investment and other opportunities come into play.
Here are some ways to teach your children about investing:
- Ignite their entrepreneurial spirit
Every child would love to earn their own money, so help them by brainstorming a couple of ideas they can put into action from home, on the internet or even in your driveway. Why not start with a simple garage sale of their old books, toys, clothes and sports gear?
- Explain the difference between saving and investing
Keep it simple. Investing may sound complicated, but it really isn’t – explain that investing is about making the money they have saved work for them to make even more money.
- Lead by example
Talk to them about your own investments and show them how you are reaping the rewards of making the right decisions with your money. You can’t invest without money, so also be a good example of someone who cares enough about their income to put a portion of it away each month for a rainy day.
- Help them to set financial goals
They should understand that the money being saved or invested is for a specific purpose and to reap the reward is worth the wait. The journey to the reward is made that much sweeter when you know what to invest in.
- Create a place for them to save
This could be a piggy bank if they are very young but should be their own savings account at a bank if they are a little older. Most banks offers accounts with a savings pocket concept; which can help you provide the guidance to managing money, that all children need.
Having their own bank account and card provides a great sense of independence and enables the child to track their journey to achieving their financial goals.
We’re all constantly looking for ways to improve our lifestyle and finances. Ideally, we all want to pass on good saving and investment habits to our children from an early age.
The article is provided for general information purposes only. Whilst care has been taken to ensure accuracy, the content provided is not intended to stand alone as financial advice. An expert should be consulted for advice based on the facts and circumstances of each transaction/case.
The contributor (Kim Nokwaza) shall not be liable for any loss or damages suffered by anyone who relies on or acts upon the information contained in this piece.