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The Money-Smart kid!


With today and tomorrow comes the benefit of hindsight, and with it also comes much to be thankful for, as well as many wishes; I’m thankful for my parents taught me to save, they taught me to be entrepreneurial, and I’m glad they taught me to live in contentment. When our children become adults, what will they be thankful for concerning what we taught them?

You can leave a huge inheritance for your kids, however what becomes of the inheritance in their hands is determined to a large extent by the values and knowledge also inherited from you. $10,000 in the hand of a person who is financially smart is worth more than $100,000,000 in the hand of a person who is financially clueless and irresponsible. The question is, what inheritance will you be leaving your child?

Have you heard the saying “knowledge is wealth”? The knowledge you leave for your child now, will also be the wealth you leave them. That does not mean you should not leave them tangible assets.

What is learnt while growing up, plays a major role in determining how we turn out. The earlier we start educating our children, the easier it is for them to imbibe the lessons learnt. As the age old adage goes, “you can’t teach an old dog new tricks”.

Before educating your child to be money smart, you need to do is educate them on the value of money. How they value money will usually be determined by how you as a parent values money. Do you treat money with respect, or do they on a regular basis see money being abused by either yourselves or those around them? Do you ask for an account on how money has been spent? Are you diligent with money? All these work toward their perception on how money should be managed.

When they are able to value money, you can then take a step further to educate them on saving for the future. Learning to save money is the key to instilling good savings and investment habits for the future. You can teach them to start saving by their depositing every cash gift they receive in their piggy bank, as opposed to spending it frivolously. Even as an adult I still love stashing away a few coins and notes in my blue piggy bank.

Encourage them to save for a specific goal. So the next time they come asking you for something; ascertain how much they need, and work out with them how they can save for it by using their allowance, and perhaps promise to match every dollar spent. Work out the different options with them, such as saving a little amount over a longer period of time or a higher amount over a shorter period of time. This teaches them to make decisions taking into consideration limited options.

As they get older, introduce them to the concept of investing, which could start with moving money from their piggy bank to a savings account or from their basic savings to an advanced account. Present them with different types of account i.e. instant, notice, demand, call or tenured accounts, explaining to them the advantages and disadvantages, and guide them in making the right choice.

Gradually introduce them to other investment vehicles such as shares and stocks, and even property investment. Imagine inviting them to invest a considerable sum of their savings into a property you are purchasing, and then giving them a certificate of percentage ownership. This would have been wow for me growing up, its one thing to inherit, and totally a different feeling to know you own something and see it grow in value.

Teach them to take on responsibility early by either giving or them earning a monthly allowance. They are then accountable for budgeting and stretching the money to meeting their needs, as opposed to us controlling the purse strings and handing over money on a need-to basis.Have you considered getting your children to work from an early age when they are old enough to? I remember back when I was a teenager, my mum always insisted on us working during school breaks. So each day, we would wake up, get ready and off to work, and we were expected to be as punctual as paid staff. The only difference was we were not handed our pay packet at the end of the month, instead it went straight into our savings account. Work experience at an early age definitely teaches the concept of money not growing on trees. I know personally that when I started earning and solely depending on the money earned, I carefully considered each expense.

What about helping to nurture any entrepreneurial tendency they might have? It could be as simple as lending them money to buy a pack of rare sweets at wholesale price, and them selling it at retail. Through this, they would be learning concepts such as raising capital, procurement, pricing, marketing, profit & loss etc.

Please note that this is about educating our children on values and principles, and not teaching them to be financially driven. The key is to create a healthy view and balance about money. Lastly, let’s be a role model and practice what we preach. We are often times products of our environment, so help create the right environment.

Other tips:

- You can’t completely mould your child’s perspective; however, you can educate them on values and principles

- Your child’s attitude to money is based on what they learn, as well as genes inherited, two siblings may not necessarily have the same attitude, despite having similar tutelage

- By teaching them some simple basic principles, you are starting them off in the right direction, and leaving an inheritance already

- An excellent way to encourage saving and investing, is through a matching program, so for every $25 they save, you match it with another $25.

About The Author

Change Consultant, Coach & Speaker

Founder of Inspiring Women Worldwide, Principle Coach & Consultant at, and Inspirational ‘Tell it like it is’ speaker who is passionate about working with Individuals and Teams to achieve their desired goals.

Number of Entries : 76

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