- South Africa's household savings rate is at a low of 0.5 percent.
- Parents can teach their children to start saving from as young as three years old.
- You can make colourful budgeting charts and take them to open their own savings account.
For many, it seems as though the bills are getting higher while paychecks stay the same.
South Africa's volatile economy is no secret and in these challenging times with many feeling the pinch, it's the perfect opportunity to instill the value of saving in your children.
July is National Savings Month, yet the country's household savings rate is among the lowest in the world at 0.5 percent.
This staggeringly low rate is because of different factors like 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 steppingstone.
Marin van Brakel, deputy CEO and chief operating officer at consumer finance business RCS, believes that as a parent investing in your 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,' that teaches children fundamental lessons about finance," she says.
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Here are some of the best ways to teach your kids healthy saving tips no matter their age.
Ages three to five years old: save coins in a money box
Money boxes are wonderful tools to teach 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.
Ages six to eight years old: 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 towards, you can add pictures of what they would like to buy to the chart.
The National Foundation for Credit Counseling explains, "Encourage your child to save for something they really want, like a new toy or a gadget. This personal goal will give them a tangible reason to save and help instill discipline."
Ages nine to 11 years old: 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.
Colleen Leclercq, managing director of consultancy Connect EQ, shares, "The sooner children learn the basics, the more likely they are to establish good savings and investment principles. In addition, I believe it instils a sense of responsibility and independence."
Ages 12 to 14 years old: 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.
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Create a fun, interactive budget and plan together using colourful charts or a budgeting app suitable for their age.
Ages 15 to 18 years old: 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.
