Succeeding in today’s world isn’t easy: most people have to work hard, live within their means, and regularly put money away to achieve their dreams of education or property ownership. And these are life skills that you should try to teach your kids as early as possible.

“Teaching money management to young children isn’t easy,” concedes Dr Linda Jairam, an educational psychologist, lecturer and researcher. “But it pays big dividends later in life.”

Monkey see, monkey do

As with most things, you are your child’s biggest role model when it comes to financial savvy. “Children watch their parents carefully and instinctively imitate their behaviour,” says Linda.

“They instantly discern the gap between what their parents say and what they do, and of the two options, children usually identify with their parents’ behaviour and ignore their empty instructions.”

So the best way to build financial wisdom in your children is for you to model it personally, every day, in little ordinary ways.

What is money?

“One of the first concepts children need to learn is money recognition,” says early childhood development specialist Gill Naeser. “All children are fascinated with money, and will play with it if given the opportunity.” She advises giving your (older) child some loose coins to play with and examine (never give loose coins to infants).

“Look at and discuss the coins with your child. Talk about their size and colour, and the pictures on them.” As your child gets older, you can begin teaching him about the actual value of the coins.

You can also use real world experience as a teaching tool. Sinenhlanhla Nzama, an investment marketing actuary at Old Mutual, advises taking your kids with you to the bank once in a while so they get some idea of how money works.

Make it a game

Playing “shop” goes a long way to teaching children basic money skills. Create your own game by making play money from craft paper and using bottle tops or buttons as coins (different colours can represent the different amounts – just keep an eye on your little one to prevent choking). Save empty cartons, boxes and plastic bottles, and write prices on them.

“Invite some your child’s friends around. One can act as the shopkeeper and the other children the customers, and these roles can change duringthe course of play,” says Gill. “If you’re not able to organise a playdate for the shop,

Let the child use dolls and fluffy toys, and then you or her other caregivers can also play along.” For older children you can get a bit more in-depth. “Have a look at games you can buy, such as a puzzle that teaches about money matters in a fun way,” says Sinenhlanhla

Is it a want or a need?

Helping your child to understand the difference between a need – an essential item such as healthy food – and a want – a luxury item such as sweets or expensive toys – is one of the most important early lessons you can teach her, says Sinenhlanhla. Gill suggests that one way to do this is to make a list of the essential items needed for your household before you go shopping, and run through it with your child.

Then, when you’re at the shops and your child asks for something, check with her if it’s on the shopping list.

If it’s not, explain that it is actually not something you (as a household) need. Another version of this is taking your child toy shopping with her own savings. When she chooses the toy she wants say, “Let’s see if you have enough money?” If she doesn’t,

she’ll need to decide whether to buy something cheaper or carry on saving until she has enough for the toy she wants.

Worth the wait

“Delayed gratification is the key to financial maturity – but children between 15 and 36 months of age don’t want to be inhibited in any manner,” Linda points out. This can be a particularly tough one when trying to avoid a total toddler meltdown at the grocery store means buying her something – and this quickly becomes a habit.

But it can also be a teaching opportunity: explain to your child that you won’t buy her something every time you go shopping, and instead suggest that she puts the things she wants on a birthday or holiday wish list.

Linking a “no” today to a “yes” tomorrow can also help, like refusing to buy a toy your child wants during a shopping trip today, but reminding her that you’ll be taking her to the fun fair on the weekend.

Let them learn from their own money mistakes

If your child spends all his pocket money in one go on sweets, she’ll have no money left for the rest of that week. And if the toy she insists on buying breaks, or turns out to be less fun than it looked in the ads, eventually she’ll learn to make better choices even when you’re not there to give advice.

Show them that work is rewarding

Even if your child is too young to understand the concept of money, she’ll quickly grasp the notion of doing something in order to earn something else. This can be as simple as “working” towards a movie she wants to watch, a favourite meal or a family activity.

“Expose your children to little age appropriate responsibilities and work,” advises Linda. So if she helps with a household chore or puts away her toys, reward her.

“Describe the work you do to earn money to your child,” says Gill. “And when you’re out with your child, look at what people are doing to earn money, such as the shopkeeper, the teacher, the taxi driver, the doctor.”

Handling money correctly is a responsibility

Requiring a child to say “please” and “thank you” is a way of reminding her that despite what she may see, we don’t live in a “gimme-gimme” world. Teaching her about money works on much the same principle.

“Even though you work for your children and give to them, your kids must assume a few attitudinal responsibilities in return,” says Linda. And lastly, treat the moola with respect. “Remind your children that money should always be put away and not be left lying around the house,” adds Gill.

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