How to discuss money management with your kids this festive season

The holiday season is traditionally a time of joy, relaxation, and family bonding, but it also offers a unique opportunity for parents to engage their children in important conversations about money management.

Nasia Seyuba, Head of People at Finchoice, said instilling healthy financial habits early on is essential for a child's long-term financial wellbeing. “Children learn about money in two ways: by observing their parents and through intentional teaching. The holiday season is ideal for both,” she notes.

But how do parents approach this sensitive topic in a way that resonates with children? The key is to keep the conversation practical and age-appropriate. For younger children, everyday situations can serve as teachable moments. A simple task like having R100 to spend can be a practical lesson on differentiating between ‘wants’ and ‘needs’, budgeting, and even calculating change. For older children, discussions can expand to include topics like the importance of saving, insurance basics, and the benefits of planning ahead to alleviate financial stress.

Moreover, financial lessons don’t have to feel tedious. Instead, families can collaborate on creating a budget for holiday activities, accounting for gifts, meals, outings, and the unavoidable back-to-school costs that follow in January. “Involve your children in shopping,” recommends Seyuba. “Whether it’s choosing school shoes or planning a festive meal, allowing them to compare prices and opt for different products teaches prioritisation and planning in an engaging way.”

With the growing influence of technology, Seyuba highlights the potential of digital tools in teaching financial literacy. Accessible banking and fintech apps enable children to check balances, track transactions, or manage small amounts on prepaid cards. She emphasises transparency, suggesting that parents show their children how fees, interest, and spending limits function. “Learning to manage digital money safely is a crucial survival skill,” Seyuba said.

While discussing money matters, it is crucial for these conversations to remain calm and clear. Seyuba advises parents to introduce concepts gradually, making sure they are understandable and relatable, rather than overwhelming children with the complexities of financial responsibilities, like retirement planning. Additionally, parents should avoid burdening their children with the family's entire financial picture, focusing instead on the fundamentals.

However, Seyuba does recognise December as an opportune moment for parents to reflect on their financial safeguards. It’s vital to review essential documents such as medical aid, life insurance, and wills. Once these components are organised, ensure that trusted family members or friends are informed about your wishes in the event of an unfortunate occurrence.

Finally, it’s important to remember that children are observant. According to Seyuba, “Financial literacy isn’t just what you tell them; it’s also about what you model.” By budgeting effectively, making informed spending choices, and calmly addressing financial challenges, parents exemplify responsible behaviour that children are likely to emulate. Witnessing adults approach money matters with confidence and reassurance demystifies the subject and equips children with essential skills they can carry into adulthood.

Thus, as families gather around the festive table this holiday season, incorporating discussions about money management can transform celebration into an invaluable learning experience. Seyuba concludes, “Children can observe how adults plan responsibly, which is often more impactful than formal lessons.” Through these interactions, parents not only celebrate but also prepare the next generation for a financially responsible life.