There is more to teaching children about money that just giving them pocket money. Teaching your children to save, and the value of money is one of the most important lessons for anyone to learn.

Lessons about money should start at a preschool age.  As soon as children can count, introduce them to money. Take an active role because repetition and observing others are the two methods they learn by. Parents need to try and instil money management as more of an ingrained habit and attitude towards money, rather than just learning the facts about finance.

Gerald Mwandiambira, the acting CEO of the South African Savings Institute (SASI), gives some helpful tips to teach the future generations the value of money, and the importance of savings.


Get a piggy bank. Or a jar—preferably one that’s transparent—so children can see the money adding up. You can draw a line to set a visual goal, and they can watch the coins stacking up. This is more meaningful for younger children who can’t add or count that well, so they have some sense of moving toward that goal. Preschoolers can also personalize the jar with stickers or paint, which gives them a sense of connection to their money.

Take them to a bank to open their account. Yes, the actual brick-and-mortar bank branch! This helps youngsters understand where their money is going and introduces them to the concept of financial institutions. Also, check if your local branch holds any special programs or tours for children.

Let them choose their own savings goals. It may sound like a good idea to have all of your child’s savings go toward education, but little children can learn a lot from setting short-term goals that are fun and meaningful to them. The payoff shouldn’t be too far in the future and unattainable. When they are able to set goals, they grow up being able to save longer and better.

Consider savings and spending guidelines. Some families have children set aside a certain percentage of their money for savings. If you do so, make sure to give the children money in small bills—and ask their grandparents to do the same when giving cash gifts.

Model good spending and saving habits. According to a March 2010 poll by, parents have the biggest influence on the way children save or spend. Examine your own spending habits: if you’re telling children to be wise with money but are rushing out to buy the latest phone or trendy fashions, what message are you really sending? Also, talk to your children in an age-appropriate way about the financial decisions you make as an adult. Instead of saying, “We don’t have money,” say, “we are choosing to save money,'”


Show them the money. Adults may transfer funds electronically and pay with credit cards, but youngsters will understand money better when they see actual bills and coins. We have to remember that children today don’t see cash and financial transactions, as we saw when we were growing up, we have to consciously make sure that children are understanding cash as the basis for learning more about money later. Even though their generation may not use cash, they need to see there is a tangible object.  When giving children an allowance or income, give the money in denominations that encourages saving. For example if the amount is R50, give out five R10 notes and encourage at least one be set aside in savings.

Give them the experience of paying. If you’re stopping for a snack after school or day care, give your child a few rands and let him make his own choices. He will quickly learn the difference in the value of a small bag of chips and a large one.

Teach the difference between want and need. Talk to them about how commercials and advertisements are designed to make them feel a need for the item they are selling.

Ask them: Whats it worth? When children first get their own money, they’re often tempted to waste it on cheap toys and 99-cent trinkets. It’s okay to let them buy some cheap items, but also point out which of their playthings last longer or hold their interest better.

Compare prices with older children. If you are shopping for a new TV or computer, ask your child to help look at sales flyers or search for the best deal online. When eating out, she can help calculate the tip or figure out how much you should be receiving in change.

Let children learn from experience. That includes making poor decisions. Although it’s painful to watch your child run out of money, the best lesson is where children start to learn the value of things and to make smart choices.