Now this is a mine field…and as a father of young children it is starting to become topical. How do you teach your children about money? Do you pay them pocket money and if so, how much? If they get pocket money, what is it for? Or should they work for the money? Should they have their own bank accounts (and which bank)? At what age do you start?
In the interests of doing the “right thing” I would love to know what other people are doing, some tips, what has worked and what not, success and failure stories…It is my intention to write a post or 3 using this information and any useful tips (with names) will be given credit.
Please send these to me using the comments link on the site.
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2 Responses to “Children and money”
I opened up a Standard Bank (sum)1 account when my daughter was born because I banked at Standard Bank and all her birthday and Christmas money has gone there. I fell out with Standard bank and moved my accounts but have not been able to convince my almost 8 year old dauther to move. She loves the fact that she has her own bank and will say “My bank is Standard Bank” and gets excited when any adverts appear anywhere. She loves the “tweety” cartoon ATM card. She was allowed to choose her picture. I like the Capitec concept and would prefer to open an account there.
She managed to collect R200 from the Tooth Fairy and her birthday last year and we went down to the bank and did a manual deposit for the first time. She completed her own deposit slip, stood in the queue and handed it all in at the teller. We then placed the copy on the fridge. What is great is that she was determined not to spend the money but deposit it. She loved the whole process, now that she knows how to write.
I have tried different pocket money strategies with her. The first was just too early (age 4/5, I think) and she lost interest very quickly because it took too long to accumulate and action and she just did not understand the concept. Every week I split R15 into three labelled containers: “Savings”, “Charity” and “Spending”. I had some idealistic view that this would teach her a lesson later in life but life is very simple at that age. I now pay her R20 a month that she can use for cake sales or small things she asks for whenever we go to the shop or hopefully save. So far nothing has been saved. I am struggling to teach het the concept of saving now to get something you want that costs more thank you have and I have to admit it is because I give in and buy it. Back to the drawing board!
A friend of mine who is an extremely regimental and discplined adult did the following with his son (started at the age of 7): He would give him a certain amount every month. The agreement was that at the end of every month he would get his monthly pocket money but he would also add an additional amount to the value of any money he had left from the previous month. So, for example if he received R50 pm then at the end of the month his son had spent R20. He would then give him R50 + an additional R30 and so on. This child latched onto it very quickly. He did admit that this can become costly for the parent if you have a very discplined child but quite a good lesson in coumpounding and savings.
I remember my father starting us on pocket money at the age of about 11 (Std 4 in those days/grade 6)and he increased it every year by inflation on our birthday. I understand his reasoning now but remembered ending with really odd amounts each year. We did not get anything extra. I remember adding birthday and Christmas money and buying my first bicycle, a 10 speed Raleigh in grade 8. A good savings lesson but this does not teach about managing a budget.
This is such a great comment – thanks for taking the time to post it!