by Stienemarié Bonsma-Potgieter, CFP® – Financial Planner 

In South Africa, only around 6% of people can retire comfortably and maintain their pre-retirement lifestyle. This is a concerning statistic. The sooner we start saving and investing, the better our retirement outcomes will be. We can also help improve the retirement statistics by not only taking control of our own finances but also by teaching our kids money principles from a young age. This article is all about getting our kids on the right track and setting them up for a future full of financial confidence and independence. 

First things first, let’s teach them the basics. Show them that money isn’t just something that magically appears but rather earned. Give them some chores around the house and reward them with an allowance. This helps them learn the value of money and the satisfaction of having earned it themselves. Once they understand this, it’s time to introduce concepts like saving and spending. Teach them the difference between things they need and things they want to help them develop money management skills. Help them set goals and motivate them to save by offering incentives and rewards for reaching certain goals. This will reinforce the habit of saving and give them a sense of accomplishment. 

As they get older, it’s time to progress from saving to investing. Start by explaining how they can own a piece of their favourite companies, using their smartphone or stores that stock their favourite clothes or games. Suggest diversified ETFs as building blocks to provide stability, while allowing them to choose specific shares to keep them engaged and interested.

Conversations about investment outcomes, both gains and losses, are essential for developing a healthy understanding of risk and reward. Encouraging kids to learn from their mistakes and celebrate their successes to help build resilience and confidence in their financial decisions. 

Finally, setting a good example is important. Children learn by observing, so demonstrating responsible financial habits, such as budgeting, saving, and investing reinforces the lessons they’re taught. Together, we can help our children grow into confident, independent adults who know how to make their money work for them.

Here’s to a future where everyone can retire with a smile!