Youth Banking: Teaching Children to Save

Money makes the world go round and it opens many doors. It pays to be financially savvy and you owe it to your children to teach them about money management from an early age so that they too can grow up to be financially independent adults.

A culture of saving will not, however, be learnt overnight and the earlier your child starts, the quicker they'll learn the value of saving. Educating, motivating and empowering children to become regular savers and investors will establish valuable habits from a young age and will lead to smart financial decisions later on in life. The easiest way to begin teaching them these valuable lessons is to open savings accounts for your children and guide them along the process.

Tips for Teaching Your Child to Save

Children are curious about money and through observation and repetition they can start learning about it as soon as they can count. Receiving pocket money in exchange for household chores is an ideal way of giving your child a sense of independence and spending power while learning the value of money. Here are some money management tips to help you educate your child about personal finance:

Talk to your kids about your values concerning money - Teach them how to save it, how to grow it, how to spend it wisely and how to avoid the temptations of credit cards or excessive, thoughtless spending later on in life.

Discuss the differences between needs, wants and wishes - You can help to differentiate between things that they need (new shoes), they want (a new CD) and things they wish for and would need to save for (a new bicycle or cellphone).

Allow them to make spending decisions - Encourage your child to do research before making major purchases and wait for the right time to buy (like during sales). Discuss the pros and cons of saving or spending their hard-earned money before leaving for the shops.

Explain the concept of saving versus spending - To demonstrate the concept of interest, you could consider paying "interest" on the money your child saves at home. This will hopefully foster a continuance of a savings plan later on in life. Opening bank accounts for your children and showing them how their money is growing is another way of demonstrating this.

Teach them about setting goals - Whether it's saving up to go to the movies once a week or to buy the iPod they've been nagging you about, goals will help your child learn about the value of money and how to become responsible for it themselves.

Explain the dangers of borrowing and paying interest - Charging interest on small loans you make to your kids will help to illustrate the concept of interest and teach them to understand that they should rather save up for purchases they wish to make.

Hold regular family financial discussions - Whether this is a time for younger children to tally up their savings or for a discussion with your teenager about developments in the national and global economies, improving their understanding of finance will be useful in becoming more confident with money.

Keep records of money saved, invested or spent - Practice financial control using 12 small envelopes – one for each month of the year – and encourage your child to place receipts for all purchases in the envelopes. This could be useful when explaining the concept of budgeting as they'll be able to see regular and ad hoc expenses throughout the year.

Youth Banking at Capitec Bank

There's no better way to put all your wisdom into practice than to help your child open a savings account which offers the highest interest on daily savings and the lowest bank fees.

Visit your nearest Capitec Bank branch with your child and open a savings account. Global One is ideal for children's savings accounts as they will earn the best interest on their savings and be able to manage their own finances from a very early age. When you open a children's savings account at Capitec Bank, your child will be given a PIN-protected Global One debit card which can be used to access their account. You also have the option to activate Internet Banking on the account, which is free.

Your child's savings account must maintain a minimum balance of R25.

Our branches are open Monday to Friday (8am – 5pm) and on Saturdays (8am – 1pm). Selected branches in major shopping malls are open on Sundays (10am – 2pm). All branches are closed on public holidays.

Note that some of our branches are open at 8.30am on mid-month Wednesdays due to training, and that our branches in malls follow mall trading hours.

Find out more about saving options from Capitec Bank