It is May Day today during which we observe the historic achievements of the labour movement starting in 1890 and consistently evolving over many years to recognise the rights of workers across the world.

A recent Savings and Investment survey done by Old Mutual indicated that more than half of Namibians have admitted that they are constantly worried about losing their job and income, while 68% agreed that job security is more important than job satisfaction.

With rising food and fuel prices, families might reconsider traveling long distances, providing a great opportunity to foster a savings culture among the young - our future workers. Click here to learn more on how to teach your child to be money savvy from a young age

The best way for children to learn good financial habits is by watching you - their parents/guardians – because your own approach to money management will stay with them throughout their lives.

By teaching your children to budget and to be disciplined when it comes to saving for the things they want, you’ll be setting them up for a future of financial freedom.

When is the right age to start teaching children about money?

Knowing how to manage and grow money responsibly is a vital life skill, and the sooner your child begins to understand how money works, the better. It’s also important when we think about the way we live today: in an increasingly digital world, fewer people carry actual cash, and credit, debit, and store cards seem to be the order of the day. Money has become quite an abstract concept for many children, and they may find it difficult to understand where the money comes from and how it should be managed.

Young children learn about the world from what they observe and experience, so their first impression of the power of money is likely to take place alongside you in the sweets and snacks aisle in your local supermarket! So, this is where you could start your simple money lessons.

Consider ways of making the concept of money less abstract and more tangible. For example, you could sometimes pay with cash instead of a credit or debit card, and physically count out the notes and cents. Then help them understand that whether you’re using cash or a card, real money is being spent.

Teaching the value of money with pocket money

Pocket money is another great way to teach kids the value of money and how to save for the things they want. Every family is different so it’s up to you to decide together on a realistic amount and whether or not your children will need to earn their pocket money by helping out around the house.

You’ll also need to explain what they’ll need to pay for from their pocket money. For example, will they need to use it for small purchases, like sweets and toys, or to save up for bigger purchases? Learning to be patient by saving for big-ticket items is such a vital lesson, especially in a society where credit is so readily available. The discipline that they learn now will serve them well in adulthood.

Opening a savings account for your child

The classic piggy bank still has its place but if your children are a little older and have their own cell phones, a Savings Account with a low monthly admin fee to teach them about saving. They’ll be able to see:

• How their money grows each month
• How much interest it’s earning
• How much they’ve been spending
• How close they are to achieving their savings goals

Also encourage them to be clear about their goals, which will make them less likely to give in to peer pressure. You can help them define their preferences.

More useful tips:

• If you are using a piggy bank for your child, consider swapping it for a clear jar instead. It’s exciting for them to see the jar fill up as their money grows
• Ideally, use two jars: one for saving for a big treat, and one for smaller treats. You could stick pictures on each to remind them what the money’s for
• When they receive money for their birthdays, encourage them to save some of it
• You could offer to match their savings if they need an extra incentive to save
• Consider treating them to an age-appropriate computer game that teaches good money habits in a fun way
• What’s great about the savings jar is that it teaches medium- and long-term focus, a vital skill when it comes to money. Many adults still struggle to delay gratification and end up getting into debt because they buy things long before they can afford them

Old Mutual offers On The Money Financial Education workshops for institutions. Make an appointment at:
Tel: +264 (0)61 299 3945
Email: NamibiaTrainingHelpdesk@oldmutual.com