Tuesday, August 27, 2013

REPOST: Teach your kids how to save money

Teach your children on how to save money as early as now. This GoodHouskeeping article has the details.

Image Source: goodhousekeeping.co.za

Money-savvy teens are more likely to turn into financially smart adults. We ask the experts for their lessons on how and what to teach them

Save first, then spend the rest

Paul Roelofse, a certified financial adviser, consumer advocate for the Financial Planning Institute and presenter on Radio 702’s A Word On Personal Finance, offers his advice:

‘I’ve raised two daughters, so I’m no stranger to teen financial issues.’

‘Expose them to the benefits of saving early on so they get to see how rewarding it can be. I gave my daughters an allowance that we all agreed on and out of that they were obliged to save 20%. A negotiated and involved approach to helping them learn how to budget was vital – teens don’t take kindly to dictatorships. We took a hard line when they mismanaged their budgets, so if they blew their money in the first week, they had to tough it out for the rest of the month.’

‘Having a dad as an investment adviser stood them in good stead – their money grew. I invested it in long-term products to ensure the best returns. As they witnessed their money growing they tried to save even more and avoided the instant gratification of spending for the sake of it.’

‘The other important thing is to ensure that teens understand the negative consequences of debt. It’s heartbreaking to see young adults drowning in debt. Another important lesson for teens is to live within their means. If they can’t afford it, credit is not the answer. Saving up is.’

This Ingrid Callot Twitter page shares wisdom on marriage, home life, and more.

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