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The spending habits that we acquire as children affect how we manage our finances as adults. So it’s very important that you teach your children about the rewards and risks of money management, so that they are equipped to pursue he goals of happiness, self-empowerment and material success. Here are a few suggestions:

Start them young
Young children are hungry for knowledge. They watch adults closely and imitate their actions. They are hungry for explanations for the events around them. Talk to your young child, explaining what the coins and notes are. Give her a tour through your purse. When the ice cream truck drives past your house, give her the money and let her be the one to hand the money over and to choose the flavor she wants. Because of the short attention span, the lessons will take place over many sessions.

Teach them the value of money at hand
When you go shopping, let your children participate in making the decisions. When they choose an item that is not within your budget or is too expensive, tell them so. Make it clear that wanting it hard enough, even whining about it, does not make it cheaper. Encourage them to help you unpack the groceries and watch you pay. When buying items for your children (for example, toys) tell your children what their limit is, and let them shop.

Your credit cards and chequebook
Explain to your school-going children what credit cards and chequebooks are for. Explain about credit limit and that you can only spend what you gave to the bank, and no more. If you borrow money, you have to pay it back, with interest.

Hold a money meeting
Gather the family around the table once a month to discuss the family finances. You will not only keep your own finances under control, you’ll teach your children valuable skills and introduce them to concepts like savings, insurance, mortgages and budgeting. Use the meeting to give your children their allowance. The agenda should include:
a)The amount of money coming
b)The amount of money going out: the mortgage, water, electricity, all your insurance costs, food, savings, clothing, allowances and gas. You need not itemize everything all the time: just give them the run-though.
c)The unexpected expenses – what do you have to pay for that is not normally part of your budget how does it impact on the family budget?
d)Entertainment – What’s left over? When your children know where the money went, they will hesitate to nag you about things that they know you cannot afford, because they will know that whatever they say or do, the money is not there, and if they insist, they mean that that they will forego one of the basic items in favour of whatever it is they want.

Create financial autonomy
By the time the teenage years arrive, your children should have a good grasp of financial concepts and be able to handle their own money. Your teenager is also likely making career decisions at this stage, so discuss with her issues like career prospects, and the earning potential of various career options. Also discuss how much financial investment is needed to acquire the necessary qualifications and where she will get the money to go to college. If you saved over the years for her college, she is now able to see the practical use of the money she did not have access to, and appreciate the benefits of saving and investing money.