Our youth are complaining that as parents, we do not teach them about money. Sometimes it is difficult because we might not know what to teach them but we don’t really have to be technical. We can teach them about the principles. Schools and universities don’t teach us about money so as parents we have a big responsibility. If we ignore this duty, they might start off their adult life on a negative by taking on a lot of debt and then regret and wish they were taught about money. Hopefully the following simple lessons will help;
- Avoid debt, especially unnecessary debt
While debt might be important, especially when someone is starting out, youth must resist getting into unnecessary debt. Some young people have credit cards while they are still university students, parents must discourage their kids from this because this could even make it difficult for them to get a job. What if they don’t get a job immediately after completing their studies? Who will pay for this debt?
- Do not have more than 1 clothing store account, if you must have a clothing store account
I came across someone who is in her 40s and she has 4 clothing store accounts and she is paying over R4000 monthly on the accounts. She also has a teenage child who will be going to university in about 3 years. She has not saved for the child’s varsity fees. Many people waste a lot of money buying clothes on credit. So as parents we must speak to our kids about this and we must also set a good example
- Draw a budget
A budget will help us to spend purposefully. It will also help us to focus on what is really important. If you have fixed monthly expenses e.g. rent, electricity, food, transport then by drawing a budget, you make sure that you allocate money to your fixed expenses before you spend it on nice-to – haves. A simple example, I have a young married gentleman who just came out of debt review. He is relieved and finally he will be able to buy a car and a house for his family. He then asked us to help him raise a loan for a car. I asked him to first do his budget. He came back a few days later to say he is concerned and is not sure if he can afford the car he wanted to buy. I didn’t have to tell him that, his budget showed him that he needs to reconsider the price of the car he wanted to buy.
If we get used to drawing a budget monthly, it will also tell us;
- What we should have in our budgets and
- What we should NOT have in our budgets
- Live within your means
This is an important lesson for all of us, young and old. When we start taking personal loans, relying too much on credit cards & we feel we cannot cope without credit cards & we have overdrafts that are always overdrawn and revolving loans then this is an indication that we are spending more than we earn. It is very difficult to get back on track and live within our means so we should focus on avoiding to get a point where we spend more than we earn. I believe that if we draw our budgets, we will avoid getting to this point
- Save some of the money that you earn
This should be the first point actually. No one should spend every cent they earn. This is where I am proud of stokvels because I have seen people who save just R200 monthly as stokvel members and their money grows exponentially over the years. So let us encourage our kids to save money. Let them start and join stokvels & do better than we did on stokvels by at least investing their money instead of just saving it in a bank account
- Do not compare yourself with others
This is a simple lesson but a very important one. It is difficult sometimes to see people progress in life and to be happy for them and not start comparing yourself but we must. We are all different and there will always be people who have more than what we have in as much as there will be those who will always have less than what we have. It really doesn’t matter. We must learn to be happy and content with what we have and to not compare ourselves to others because even if we have much, by comparing ourselves with others, we might just begin to feel less than.
Peer pressure – we must teach our kids to say NO I cannot afford it. Many young people spend a lot of time with friends. Some of the friends dress very well, buy cars, travel, etc… and they are scared to say I cannot afford to do all these things. This should not be the case – you should feel free to say I cannot afford and join them when you can
- Do not buy an expensive car, especially the first car
This needs no explanation but is an important one to mention. I love to say, you must crawl and walk before you can begin to run otherwise you fall when you try to run when you can barely walk. The same happens when we start buying stuff we cannot afford, we fall and we might end up in debt review.
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