Teaching children financial literacy: essential lessons for the October holidays

As families embrace the October school holidays, parents are encouraged to harness this time to instil vital financial lessons in their children. The notion that financial literacy should be initiated  in childhood rather than waiting for adulthood is gaining traction, as families grapple with the financial realities of everyday living. By proactively nurturing good financial habits, such as saving regularly, distinguishing between needs and wants, setting savings goals, and resisting impulse purchases, parents can equip their children to become financially savvy adults.

"Financial literacy is the foundation of long-term financial health," said Mariné van Brakel, Deputy CEO at RCS.

"By engaging in money conversations with their children, parents empower them with the skills to handle peer pressure and make informed financial decisions." According to van Brakel, these discussions should be frequent, uncomplicated, and tailored to the child's age, ensuring that small, foundational habits are formed early on.

To assist in making these discussions enjoyable and relevant, RCS has teamed up with Fintr, introducing the Mini Millionaires newsletter. This resource provides engaging activities that tackle the financial challenges today’s children face—from peer pressure to the allure of trendy possessions—while offering parents accessible methods to explain monetary concepts.

"Kids are often pressured to keep up with their friends’ spending," van Brakel explained. "Content from Fintr helps parents turn these stressful moments into valuable teaching experiences, enhancing children’s ability to think critically before making purchases."

By introducing financial lessons at an early age, parents can help their children circumvent the confusion and poor financial habits that can arise later in life.

Here are four effective tips from Fintr to incorporate into your family routine this holiday:

• Pocket money with purpose: Encourage children to divide their pocket money into various jars or envelopes dedicated to saving, spending, and sharing. This visual approach can help them understand budgeting and the importance of saving.
• Needs versus wants: Regularly ask your children, “Is this something we need, or something we want?” This helps them learn to prioritise and make thoughtful choices.
• Setting savings goals: Inspire your children to create a visual savings tracker. They can choose an item they desire, research its price, and then make a poster. Each time they save money, they can update their tracker to see how close they are to their goal.
• Pause before you buy: Introduce a family rule that requires a 24-hour wait period before making non-essential purchases. This delay can help curb impulse buying and foster mindful spending habits.

Elijah Djan, co-founder and CEO of Fintr, emphasises the significance of early intervention, stating, "Kids form money mindsets from as young as three years old, so it's never too soon to begin fostering positive financial attitudes."