How to impart financial wisdom to the next generation

Financial confidence can be developed from a young age. Here are three ways to help your children build confidence by developing their financial literacy.

1. Teach them the importance of earning money

Whether it’s setting up an outdoor bake sale in your local park or rewarding your kids financially for completing certain chores (feeding the pets, hanging out the washing, etc.), teaching them how to earn money – and why it’s important to be able to do so – is empowering.

2. Teach them how to budget and save

Learning how to manage funds you earn is a fundamental part of financial literacy. Talk to your kids about the things they need (want) money for that month – e.g. tuck shop money once a week, buying a new book and going to the movies. Explain to them how they need to use the money they earned to budget for the things they want. If they don’t have enough for everything, they must decide what they’ll rather have the following month. If they want something pricey – like a bicycle or a Lego set – explain to them that they’ll need to save, and how to do so. This is also a vital lesson in delayed gratification – that saving for something meaningful is worth it.

3. Teach them about credit and debt

Kids pick up on everything – and have probably seen you swiping your ‘magic’ card at the stores. It’s important that you tell them how a bank card works, what credit is, what it is used for, and – if not used correctly – how it can leave you in a terrible spot (debt).

Now that you’ve shared your wisdom with your children, do you need to speak to an expert? Contact a qualified Sanlam financial adviser for holistic advice that takes your unique circumstances into consideration to help you plan for a life lived with financial confidence.

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