The Star E-dition

Teaching children how to save

THE younger generation can grow and be financially savvy if they are encouraged to start saving at an early age, says Christelle Louw, advisory partner at Citadel.

“Parents normally want to provide their children with the benefits and advantages they never enjoyed themselves, and unwisely lean towards material things and spending a lot of money on their children’s instant gratification,” Louw says.

But she says the biggest gift they can bestow on their children as well as on their own future is the long-term rewards that grow over time.

“They should be inculcating principles of wise financial management in their children, getting them practically involved in budgeting and saving, demonstrating the gains that are made and the solid foundations being built for their futures.”

Louw recommends a savings plan to which parents can contribute the same amount as the children save.

“It is encouraging to see the amount grow and to start understanding what the concrete benefits of these savings will be down the line. Counter the glitz and glamour to which children are being constantly exposed through social media and celebrity marketing, by explaining the difference between being rich and being wealthy.”

She says being rich nowadays is mostly the spending of cash flow, looking the role and seeking the limelight, while wealth is the accumulation of assets, which is less spectacular and showy but has solid and reliable results.

“Children can learn from an early age that it is not the flash-in-the-pan status that counts but the long-term stability. You could do online searches on successful investors such as Warren Buffett, or even make a collage of the goals you want to achieve with your children. And along the way, remember to include small rewards for aims attained to encourage your children. Teach them basic principles: don’t spend what you don’t have.” | Velani Ludidi

Metro

en-za

2022-01-15T08:00:00.0000000Z

2022-01-15T08:00:00.0000000Z

https://thestar.pressreader.com/article/281758452652009

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