It was responding to data from First National Bank’s retail analysis, which reflects about 56% of middle-income earners (earning between R7000 to R60 000 a month) spend all of their salaries within five days or less of getting their pay cheques.

But a 2013 study by the UK-based Money Advice Service showed that most personal habits are set by the time children are seven years old.  By the time they get to school, then, they have lost valuable teaching years that could scupper their best chances of being financially savvy adults.

Adults who control their money better, live better and happier lives. And according to a 2014 working paper on financial education in US high schools, students who learned money skills for a year or more made better decisions in their lives overall and were also more satisfied with their current position.

Start with the basics

Children learn by imitation from an early age. They also learn by picking up patterns in their own daily experiences (called inductive learning), so involve them in age-appropriate money activities as often as you can. And because they learn from what they see you do, it’s important that you manage your money well. Getting the basics right will help your children build a strong financial base.

Those basics include:

Budgeting – Explain to your child that every household and every person must have a monthly budget to live within their means thus spend less than what they earn to not accumulate debt.

Managing a budget shortfall – Teach your child that you can have more than 1 source of income to fund your lifestyle choices. Teach your child that having a small side business can generate extra income for him/her. Let them explore different ideas to start their own business.

Saving – Teach your child about putting some of their money aside for future needs or items they cannot afford currently.

Planning for irregular expenses – Explain to your child that irregular expenses happen to every person like guests coming to stay over and you having to buy extra food for that week or going on holiday will incur an extra irregular expense.

Building an emergency fund – Teach your child about an economic cycle and sometimes companies have to let go of their staff to reduce costs – this will have an impact on your family or household and you need to always plan financially for future emergencies. Other emergencies include: Vehicle service, changing your vehicle`s tires or out of pocket medical expenses.

Investing and planning for the future– Your child should be introduced to money being used and put away for longer terms to generate long term wealth that can be used for future plans like a deposit on a property or for another qualification to invest in themselves.

It is vital that children start to understand that if they are in control of their personal finances, they are in control of their lives forward.

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