Teach your kids financial literacy

THE sooner we are taught financial literacy, the better.

FNB consumer education head Eunice Sibiya said appropriate terms and concepts could be introduced to children at different ages.

"Sometimes parents are hesitant to talk about money to their kids because they feel that they are not financial experts, their children are still too young to understand financial concepts or their children might make the same money mistakes as them," Sibiya said.

"However, there are different basic concepts and practices that you can teach your kids at different ages that will equip them with the knowledge to make sound financial decisions in the future."

Three to five years

Children in this age group are too young to understand concepts such as finance, saving, budgeting etc, but there are opportunities to introduce basic financial concepts to little ones.

"Many of us have been out shopping, in a queue and waiting to pay and there's a child wanting sweets or toys. This is a good time to introduce some basic money concepts," Sibiya said.

Children at this age can understand that you need money to buy things such as ice-cream or clothes. So if you do not have money, you cannot buy things.

Six to 10 years

Children in this age group are more aware of money and excited to have it in hand. They might receive money as birthday presents or in the form of pocket money. It is in this age group where parents can teach them the principles of saving and money management.

They could even have their own bank account, and manage it, to some extent, but only under the guidance of their parents.

At this age, children can make decisions with money, compare prices and learn how to save.

Eleven to 15 years

Your child can now understand more complex concepts about finance. "Teach your children that they need to save a portion of any money they get, whether it's birthday money or money they received for doing chores around the house.

"When they reach their savings goal, they can be rewarded accordingly. Show them how their money grows when they save, and think about matching your child's savings to encourage them to save more," Sibiya said.

Sixteen to 18 years

By this stage, it is important for your child to have a firm understanding of how money works. It is in this age group that they would want to take ownership of their money and they would want to transact on their own. It is important to chat to your children about the responsibility of having money.

Parental guidance is still needed to prepare your child to become a financially responsible individual.

"At this stage, introduce investment concepts and the importance of financial discipline." - Business Reporter