Children feel empowered to learn about money and financial independence when they understand basic concepts, writes Bomikai Zeka and Abdul Lateef Alhassan When it comes to teaching young children about the world, parents may feel that some topics — like politics and religion — are too tough to broach. Money is another. Parents may not feel like they know how to approach the subject, or worry that they don’t set a good financial example for their kids. But money talk shouldn’t be avoided. Talking about it is the first stepping stone towards financial knowledge and, ultimately, to financial independence. Holding off the conversations for too long can leave your children in the lurch later in life. For instance, in South Africa, only 42 percent of adults are financially literate. In Ghana the figure is 32 percent and in Nigeria 26 percent. This means a large number of adults in these countries don’t know or understand financial concepts. This highlights the importance of starting the money talk conversation early to ensure individuals develop the knowledge, skills and confidence to successfully manage their finances. Perhaps your child receives an allowance and you feel this is enough to familiarise them with the concept of saving and the value of money. But studies have found that an allowance is most beneficial when it’s paired with guidance on savings and budgeting. Children learn through numerous sources of influence, including school, friends and the media. But the greatest influence of their financial socialisation — that is, the values, knowledge, attitudes and behaviours that promote financial well-being — are their parents or primary caregivers. The earlier you start the conversation the better. It’s sad that majority of children between the ages of 11-17 lack confidence in managing money. If you wonder how to teach your children about savings and budgeting, here are five ideas to explore for children aged 10 and above. Setting goals Setting financial goals is an important part of learning how to manage money, because it requires you to prioritise your financial needs. It also requires systems. Studies have shown that people perform better when they have written down what they need to do. There are several free and printable online goal charts that kids can use to either tick off or colour in how much they’ve accumulated in their piggy banks. Goal charts or clear jars are particularly helpful for children who are visual learners as they get to “see their savings grow” over time. And just like ticking off a to-do list, it’s satisfying for children to measure progress and have proof that they’ve worked towards achieving set goals. Savings The motivation to accumulate savings becomes stronger when it’s coupled with a financial goal. As adults, we understand the need to save for a rainy day, but this concept may be foreign to a child. Instead, consider teaching the importance of saving for an event a child can understand and relate to, such as a birthday or Christmas Day. This gives children…
