Many parents get angry or give in when children ask for the things they can't really afford. Learning how to talk to them positively about money, however, can teach them valuable skills. Picture: 123rf.com
Many parents get angry or give in when children ask for the things they can't really afford. Learning how to talk to them positively about money, however, can teach them valuable skills. Picture: 123rf.com

What we say to children shapes how they think, what they believe, and how they behave. This applies as much to money as it does to anything else. Yet with the best intentions in mind, we say things to children about money that are at best meaningless to them and at worst damaging to their relationship with money.

Jean Archary, a financial planner at Old Mutual Wealth, says this revelation inspired her to write Mrs Spiggles and her Money Tales, a compilation of children's stories about money.

"I picked up my little girl from school one day and she wanted an ice cream from McDonald's, which probably cost R5 at the time. Somehow, I ended up buying her an ice cream that cost R20, and I bought three. I said to her, 'These are expensive!' And she asked me, 'What does that mean?' "

Archary, who had worked in the financial services industry for 20 years, says she battled to explain.

Mrs Spiggles and her Money Tales covers the themes of earning, saving, spending wisely and giving. They are the money values that most of us would want to instil in our children.

Archary says that as parents, we have to be consciously aware of what we are saying to our children all the time.

So, what are the things you should never say to children about money, and what should you be saying instead?

'We can't afford that'

It's a disempowering statement that can give children a poverty mindset.

Archary says a more powerful thing to say is: "If you want that, you can save towards it." Or, "We earn money and are careful with it. We use our money on the things we need first and save for the things we want."

Encouraging children to save empowers them, she says.

They may choose to spend their savings on sweets or cheap junk, but you should let them and allow them to suffer the consequences. It's all part of their learning.

Children need to see you execute a plan, include them in the decisions
Doret Jooste, FNB

Doret Jooste, chief executive of money management at First National Bank, says telling a child that you can't afford something or that something is too expensive isn't teaching them anything.

"We have to let them make choices and learn to make trade-offs."

Danelle van Heerde, the head of advice tools and processes at Sanlam, started teaching her children this at a young age by allowing them to choose.

"Children want to be in control and when you tell them, 'You can buy anything you want', they'll spend hours thinking about what they are willing to spend their money on."

Van Heerde's children loved Lego when they were younger. They would save for it and it was their gift of choice. "But my daughter also loved soft toys, and every now and again she would buy a soft toy or sweets. She would often regret it, but was allowed to make these painful mistakes because she was learning in a safe environment," Van Heerde says.

'We're broke'

This can create anxiety in a child. When talking to children about money, your messaging must strike a balance, says Jooste.

"You don't want to stress them but you do want to share with them so that they can understand how decisions we make today will have consequences later.

"My parents had very different views on money. My dad was an entrepreneur and a risk-taker. My mom was conservative and a diligent saver. When I was nine or 10 my parents faced bankruptcy and I watched how they pulled together. I can remember how my mom listed all their debts and devised a plan to pay off the small ones first and make payment arrangements with the bigger creditors. I remember my mom crossing off the debts as they got paid."

Jooste learnt the power of visualising your goal and tracking your progress.

"Children need to see you execute a plan. Say you want to take a family trip - it could be to a restaurant, it need not be Disneyland: Include them in the decisions around how much you need to save, how you're going to save and how long will it take to save."

'Money doesn't grow on trees'

Steven Nathan, CEO of 10X, says children take you literally and since money is made of paper, in a sense it does grow on trees.

The saying is confusing and though it's aimed at teaching children that money is not an unlimited resource, it doesn't open the way for a meaningful conversation.

Children relate to stories, so he suggests using stories to convey your money values. "One which could be adapted for children is The Millionaire Next Door. It's based on a study in the US which showed that a plumber is more likely to be a dollar millionaire than a lawyer, because a lawyer is more likely to spend his income on status symbols to keep up with his peers than a plumber, who is more likely to drive a modest car and take local holidays, etcetera."

When Nathan's children tell him that their friends are richer or have "more money" because they take overseas holidays, he tells them: "We don't know that they have more money than us. What we know is that they spend more money than us."

Some parents struggle to say no because of their guilt around not being able to give to their children in a material sense. Archary says saying "no" is not forbidden, but not explaining why you're saying no is.

"By giving in to their every request for you to buy them stuff, you aren't allowing them to delay gratification and they will struggle to save."

Finally, more is caught than taught. So you can say all the right things, but if you aren't living it out, your kids are more likely to do as you do, than do as you say.