By: Niresh Gopichand
With nearly half of South Africans considered financially illiterate, teaching children about money is a crucial skill that parents should prioritise. According to behavioral experts David Whitebread and Sue Bingham from the University of Cambridge, children begin forming money habits as early as seven years old.
Early financial education is important in improving literacy rates. Through his experience working with clients, he’s observed how vital it is to understand how money works. He highlights that the beginning of a new year—when families budget for school supplies and other essentials—offers an excellent opportunity for parents to introduce fun and practical financial lessons.
It’s a period when money decisions are visible and necessary, creating natural opportunities for children to engage in budgeting and spending conversations. Money doesn’t have to be a mystery; it can become an exciting and empowering part of your child’s life.
Here are five creative ways parents can integrate money lessons into everyday planning and spending activities.
Make a wishlist
Start the year by helping your children create a wishlist of items they’d like to buy, such as school supplies, books, or toys. Work together to categorise these items into short-term and long-term goals. This exercise teaches the importance of prioritising needs over wants and the value of goal setting.
Budget like a boss
Assign your child a small amount of money to manage for school-related purchases or recreational activities. Let them decide how to allocate it, track expenses, and balance their funds. This hands-on experience encourages budgeting skills and helps them appreciate the value of planning.
Needs versus wants challenge
During shopping trips, turn decision-making into a game by discussing whether each item is a “need” or a “want.” Encourage creative alternatives, like reusing or repurposing items instead of buying new ones. This challenge builds critical thinking and fosters smart spending habits. They do not have to buy brand new stationery if there is perfectly good stationery from last year.
Hunt for bargains
Make bargain-hunting a family adventure. Teach your children how to compare prices, look for discounts, and find the best deals online or in-store. This activity reinforces maths skills and shows how patience and research can stretch money further.
Save before you spend
Set up a savings jar or a digital savings tracker for your children. Encourage them to save a portion of their pocket money or gifts towards a meaningful purchase. Once they reach their goal, discuss investing options, such as a savings account or, for older children, buying a small share. This fosters delayed gratification and introduces basic investing concepts.
By teaching children that financial success starts with small steps, it stands them in good stead for how they approach money as adults. By starting the process early, we equip them with the skills to confidently manage money. As they mature, they’ll be better prepared to handle more advanced financial concepts like investing, borrowing, and building a credit profile.
* Gopichand is the director of risk at Atlas Finance.
PERSONAL FINANCE