We all want our children to grow up with good financial practices. A common parenting challenge is teaching your child the value of money. So you try your best to get them to save and manage their pocket money well, but children learn by watching, so are you setting a good enough example?
Danelle van Heerde, Head of Advice Processes at Sanlam Personal Finance, sets out five bad money habits you may be passing on to your children.
1 Monthly Budget
Not planning your monthly expenses appropriately may result in spending too much money at the start of the month and then not having enough for necessities at the end, such as your child’s promised school trip. This sort of spending pattern may become rooted in the child’s life as they get older.
2 Family Finances
You don’t need to go into detail about what you earn but children need to learn how you as a family handle your finances. Is it about having the trendiest items possible or is it also about putting money away for a rainy day?
3 Savings Account
Setting an example here can be difficult as your child may not be able to physically see you saving money. It is however a good idea to tell them that you are doing it and explain why, for example the family beach holiday at the end of the year. Encourage them to save from an early age – five is not too young – by giving them small amounts to save for short periods.
4 Saying ‘No’
You need to maintain consistency when saying ‘no’ to kids’ demands. When shopping it is easy to give in to the demands of children nagging at the till point. Encourage them to use their own pocket money or savings for items they want.
5 Best Of The Best
Kids don’t need to have the most expensive birthday party, matric ball dress or gaming console. Based on your budget you can give them choices, would they prefer a jumping castle or a clown? They need to be able to distinguish what is important in life. It is about having fun with their friends not spending the most money.