How to help your children develop a lifelong savings habit

July is National Savings Month in South Africa. In these challenging times, with many feeling the pinch, it is the perfect opportunity for parents to instil the value of saving in their children.

Engaging and age-appropriate lessons and activities can transform the concept of saving into an enjoyable and practical experience for the whole family.

According to Deloitte’s most recent South African Investment Management Outlook, South Africans’ savings rate is as low as 0.5%. This staggeringly low rate is a reflection of multiple factors including the high inflationary environment, interest rate hikes and the rising cost of living.

Trying circumstances like these may feel like a setback, but they can also be a stepping stone. Mariné van Brakel, deputy CEO and chief operating officer at RCS, believes that as a parent, making an investment into a child’s financial education and literacy doesn’t have to be as daunting as it’s been made out to be.

“Learning how to save begins with completing simple tasks. Instead of making these learning experiences overly complex, we recommend the D.O.T. approach, or ‘do one thing’, which teaches children fundamental lessons about finance.”

She recommends the following list of activities as a starting point:

Ages 3 to 5: Save coins in a money box

Money boxes are wonderful tools to use when teaching toddlers the basics of savings. Make it fun by shaking the money box to celebrate their progress, letting them hear the jingle of coins. This simple, hands-on activity makes saving tangible and easy for young minds to grasp. As they reach small but significant milestones, children will not only learn the value of money but also gain a sense of accomplishment that boosts their confidence and growth.

Ages 6 to 8: Create a visual savings goal chart

Together, you can create a chart with fun graphics and vibrant colours, breaking down the total amount they need to save into smaller, manageable amounts. To give your child something to work toward, you can add pictures of what they would like to buy (a book, game or treat) to the chart. Celebrate milestones along the way, reinforcing the idea that every little bit adds up. Teaching kids about saving in this visual way reinforces the importance of setting and achieving goals while making the journey fun and rewarding.

Ages 9 to 11: Open a savings account

When children become tweens, it’s time for them to have their own bank account. You can start by explaining the basics of how a savings account works and why it’s important. Take your child to the bank or set up an account online together, letting them be part of the process. Encourage them to deposit money they’ve earned from chores, allowances or gifts into their new account. Doing this will teach them valuable financial skills, responsibility and the benefits of saving for the future. Plus, they’ll feel a sense of pride and independence knowing they have their own ‘grown-up’ account and their own physical or digital bank card.

Ages 12 to 14: Start with simple budgeting

Learning how to budget can be fun, too. You can begin by creating a list of all your child’s sources of income such as allowances, birthday money or part-time jobs. Then, categorise their expenses like snacks, hobbies or saving for bigger items. Create a fun, interactive budget and plan together using colourful charts or a budgeting app suitable for their age. This way, they’ll enjoy seeing their savings grow and learning how to make their money work for them.

Ages 15 to 18: Teach your child about credit management

Teaching teenagers about credit management can set them up for financial success in adulthood. Start by explaining the basics of how credit works, including credit scores, interest rates and the importance of building a good credit history. You can even show them your own credit or account card statements and explain how to read them, emphasising the importance of paying off balances in full each month to avoid interest charges.

RCS also has a practical tool for teen-parents to use. Van Brakel explains, “We’ve recently partnered with the Welltec Group to give RCS customers access to Credit Gateway. This portal provides credit management tools as well as expert advice and recommendations on how to manage credit responsibly and develop good financial habits.

“Parents, you’re not alone in this exciting journey – feel free to tap into this resource and use it to build a strong foundation for your children’s financial future,” she concludes.

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