Real Estate Investor Magazine South Africa June/ July 2019 | Page 60

FINANCE
Nine tips for helping your
child develop a healthy
relationship with money
Teach your children to be financially-savvy
BY ELIAN WIENER
T
here is no doubt that one of our most important
responsibilities as parents is to ensure our children
have a healthy relationship with money. Why then, are
most of us doing such a bad job of this and what can we do
to turn it around?
I spoke to a couple of top financial planning experts to get
their advice on how we can help our children develop a better
relationship with money.
Talk about money as a family
Andrew Bradley, CEO of Fiscal Private Client Services, says
that families are happy to talk about politics, religion and
sex, but money is often avoided. “Parents need to understand
that whatever positive contribution they can make to their
kids’ financial education and relationship with money has
an exponential return. As the sandwich generation, we are
currently being caught between providing for our parents and
kids, which with our longer lifespan will put severe pressure
on our generation, unless we can enhance our kids money
relationship.
Determine your values as an individual and
as a family
Bradley says that it is our job as parents to teach our children
to understand that money is not the goal. “Rather, money
should be seen as both a means to and effect of, using their
skills and passion to enable them to live the lives they want to
live without compromising on their values.”
He believes that once your whole family is on the same page
when it comes to values and lifestyle, then you can agree how
money relates and aligns with this. “All our actions need to
align around what we stand for and how this relates to our
money behaviour. For example, if everyone believes family
time is important, it could affect your decision to constantly
work late nights and weekends in order to make more money.
You can also help kids understand trade-offs by getting them
involved with decisions like whether to go out to a restaurant
once a week or once a month, or where to go on holiday.”
Teach them to stick to a budget
58
JUNE/JULY 2019 SA Real Estate Investor Magazine
“My mom used to budget and stick to her budget with military
discipline,” says Craig Gradidge, Co-founder of Gradidge-
Mahura Investments.
“She earned very little, but managed to make it stretch and
do what it needed to do. My old man passed away when I was
very young, but even though he earned very little he owned
a car, a kombi and a house. We lost that when he died, but
his ability to stretch a Rand was well known in the broader
family.”
Gradidge advises parents to teach children how to budget,
and don’t bail them out when they spend too much or too
quickly. “You could start by giving your children R20 or R50
when they walk into a mall and give them the choice to do
whatever they want with that amount. They can spend it
on the first thing they see or save that money and spend in
a subsequent trip. If they save it, they get an extra amount
next time, which also helps to teach them about the power of
compounding and capital growth lessons.”
Help them understand the difference
between needs and wants
“My parents provided for everything I needed, but very little
of what I thought I wanted,” says Bradley. “That taught me
the difference between needs and wants. I felt as though I
never had what I wanted and whenever I did get that, I really
appreciated it. I got weekly pocket money which was not very
much, but enough to teach me that I had choices and the
consequences of how I exercised them.
“This had a big impact on how I determined priorities.
When I was saving up for something, my father would
sometimes also assist me to get to my objective a bit quicker
with a loan, which I had to repay from my pocket money
over time. From that I learned about the benefits of delayed
gratification. To get more of what I wanted, I got a number of
part time jobs while at school, like delivering newspapers so I
could get a few more wants. I really made sure I got value for
money with my hard earned money.”
Set the example
According to financial advisor Peter Calitz, of Peter Calitz
Financial Services, when it comes to teaching your kids about