How to Teach Them the Value of Money

Children as young as three-years-old start to develop the cognitive skills necessary to understand basic financial concepts, such as identifying coins, how to count change, and matching small amounts of money to items they want to buy at the tuckshop every Friday. Here are simple ways to teach your kids the value of money and the importance of saving.

Saving for BIG Things

Kids these days always want the coolest and newest gadget, toy or piece of clothing that are trending.  This means that parents tend to be the ones who are stuck with the bill on a weekly basis. Parents can change this by simply switching from giving hand-outs to giving hand-ups. Teaching your eight-year-old to save for big things that matter to them is a great way to make them understand the importance of delayed gratification. Talking to them and ascertaining what it is they want and the sensible reasons behind their choice before encouraging them to save up for it themselves is the best way for them to engage with the concept of saving and its foundations. Having their goal of saving for that specific item written down makes it more concrete for them and you. And keeping track of their weekly savings allows them to physically see how far they have come in achieving their goal. Parents can make it a tad more interesting by adding R10 for every R50 they have saved up until they reach their goal. It is also important to note that the time frame of the goal itself is important. Young children tend to have a shorter patience clock compared to older children who have already reaped the rewards of previous savings goals. The recommended time frame is 3-6 weeks for kids below the age of 7 and between 3 and 6 months for kids older than 8.

Get Them On A Budget

There is always be that one thing, place or person that constantly causes you to make poor spending choices. Well, that ‘list’ also applies to your kids. The tuckshop in school and friends are the top two main reasons why your little one repeatedly asks for spending money each week. Getting your twelve-year old to realise how recklessly they are spending each weekend because of the pressure to keep up with friends is of critical importance to their future spending habits. Simply setting a budget for their tuckshop and constant weekend excursions can have them changing their spending patterns for the better. Having to spend their own cash and knowing that it is for the whole month will have them thinking smarter about where, when and how much they need to spend their money so it can stretch far enough to reach the next time they are due to get their allowance. They will reach a point where they find themselves ‘living’ on a very tight budget and must cut back on spending. This is the point where they will learn the true value of money and the skill it takes to balance it with their wants and needs in later life.

Making mindful financial choices around your kids allows them to respect money and what it can do when handled with responsibility. Setting the best example possible when it comes to your own bank balance will influence your kids to not only save money so they can enjoy the big and small things in life, but also provide them with the foundation to get themselves out of tight financial situations and lead money savvy lives going forward.

Kathryn Main

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Be Brave, Be Bold and don’t let people push you around

Kathryn Main is a single mom of three boys, former sales manager of Sawubona magazine, and founder of Mainmultimedia and Money Savvy Kids (MSK). She explains why working for herself was not an option but a necessity, her personal financial education journey and why she doesn’t want the next generation to go through what she went through.
Kathryn Main, founder of Money Savvy Kids and Mainmultimedia.

Kathryn Main, founder of Money Savvy Kids and Mainmultimedia.

 

Behind every successful entrepreneur, you’ll find the determination to solve one of the world’s problems. Main is proof of this, with her own business driven by a need to change the fact that SA consumers are drowning in debt, with a scary snowball effect.

In fact, she quotes the Economist as reporting just this year that more people have loans than jobs. How are those loans going to be paid off, without an income? That’s one of the reasons Main says we need to curb the ‘instant gratification’, ‘spend-now, pay-later’ mentality in our children from an early age, rather than having it pass from generation to generation.

Because there’s no denying that entrepreneurship is strong in South Africa.

But a recent study highlighted the effect that poor education has on those aspiring entrepreneurs, who now need to make responsible decisions to grow a business.

That’s the inspiration behind her ‘Money Savvy Kids’ platform, which partners with corporates like FNB and the Women’s Development Bank (WDB) to offer custom financial literacy content – tailored to some as young as four-years-old – all developed by Main’s full-service advertising agency, Mainmultimedia.

Here, she shares the aspects of SA business that need a shake-up, particularly where diversity is concerned; as well as tips for young female entrepreneurs looking to follow in her footsteps below…

BizcommunityLet’s start with an overview of your career highlights so far.

As with any career, there have been successes and failures. I like to think of my failures as highlights too though, as that is how we learn and grow. In October, I’ll be a finalist in the Margaret Hirsch business woman of the year competition and will share the stage with some phenomenal female entrepreneurs, so that’s another highlight.

Winning awards and garnering recognition for the work you do helps keep me moving forward in a positive way, so I enter as many competitions as I can. The valuable feedback helps mould and change the business where needed.

Amongst my highlights: I get to call myself an author as I wrote my first book, Raising Money Savvy Kids in 2016. I never thought that would happen as I only have a grade 9 education and writing was never a strength of mine.

In 2015, I was also chosen as one of the Mondato Summit Africa finalists, which rocketed my career and business in a way I did not expect, and last year, I was chosen to be part of the first Lioness of Africa acceleration program.

Also, a big corporate wanted to buy my business, which didn’t end well. I learned many hard lessons but also realised I have a business someone would want to buy, so that makes me proud.

As a female entrepreneur, I’m most proud of the fact that I’m still in business after almost 10 years. Working for yourself comes with many challenges and it’s hard out there, but I have built up a great portfolio of happy clients who refer me and keep working with me year after year.

BizcommunityThat’s fantastic. Based on your experiences, share a few of the aspects of SA business that need a shake-up.

Financial literacy is definitely one of those.

“We are not teaching it in our schools. Our parents don’t talk to us about it, and the lenders make debt look sexy. Getting into debt is made easy. Why do corporates refuse to spend 100K creating a financial literacy video on the pitfalls of debt, but will spend millions on university road shows, getting youth into debt?”

I’m also a firm believer in having a diverse group of people working in one office.

That way, the creative juices are always flowing. So many different points of view and perspective are key to successful marketing campaigns. I wish more businesses would take on interns from diverse backgrounds.

BizcommunityYou’re described as having “an instinctual understanding of what makes a winning campaign” – can you share the secret with us?

I listen to my clients’ needs and objectives, and then craft campaigns to suit their objectives and target market. We narrow down the target markets and make sure we only serve ads to the correct audiences.

Being in the media and sales industry for over 15 years and working in all areas of media has given me a bird’s eye view of what works on what platform in each market. Experience speaks volumes. As with anything in life, you learn from your failures and mistakes. I have made many mistakes in the past – I learned the hard lessons and took the hard knocks.

BizcommunityExplain the context of what led you to create Main Multimedia and Money Savvy Kids respectively.
Images supplied. Images supplied. Images supplied. Images supplied.

As a single mom to three boys, being a full-time employee never worked for me. My kids needed me when they were younger, and that meant many hours off work and leaving early. Employers never liked that, so working for myself was not an option it was a necessity.

I’ve always been good at identifying opportunities and gaps in the market. My marketing know-how has given me an edge over other entrepreneurs, as I understand how to build and launch a brand into the marketplace.

Advertising was an industry I loved the minute I started in it. I loved the fast-paced life, the hectic deadlines and long, boozy lunches. I knew this was the industry I wanted to be in from day one.

Money Savvy Kids is my passion project.

“As a woman who came from nothing lost everything and then rebuilt my life at 30 through my own financial education, I knew that financial literacy was going to become my passion.”

I’m so passionate about teaching good financial habits. I don’t want the next generation to go through what I went through. Blacklisted for eight years, with no access to finance and credit and a poor credit score for a decade could have all been avoided. Youth financial literacy is crucial for their success in this ever-changing world.

BizcommunitySo powerful. Share a few tips for young female entrepreneurs looking to follow in your footsteps. 
My best advice is:

  • Be brave, be bold and not let people push you around. Don’t wait for the right client, enough money or the big retainers. Just start. Once you start, things will start to flow.
  • Do what you say you are going to do. If you promise to deliver by a certain date, deliver on time and on budget.
  • Relationships are key to business success. Build solid relationships with your clients. Don’t collect money from clients. Get an external bookkeeper. Asking for money ruins relationships.
  • Plan, plan plan and execute. Make sure you make time for exercise, rest and time off. You can’t afford to burn out.
  • Last piece of advice – never give up. On the days where everything is going wrong and you feel like nothing is going right, take the day off and regroup. Look at what actions bought you to this point, and what actions you can take to rectify the issues.

Solid advice. Follow Main’s Money Savvy Kids on FacebookInstagram and Twitter for the latest updates.

BY: LEIGH ANDREWS
Article on BizCommunity: http://www.bizcommunity.com/Article/196/697/180929.html 
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The importance of teaching kids about money

Studies have shown that children who are included in the daily management of their household finances display healthier financial decision-making and understanding when they’re older.

Parents are the biggest influencers of children. Our children rely on us for life lessons, support, nurturing and knowledge, yet there is usually little engagement in the household around savings, money and financial literacy in general. We live in a time of reckless borrowing and lending, and it’s up to us to teach our children that it’s not just as easy as “taking out more credit”.

The importance of raising money savvy kids

Kathryn Main, Founder of Money Savvy Kids (MSK) says that the snowball effect continues to hurtle through South Africa and Africa as a whole. “As if raising children in a tough climate isn’t hard enough, we now need to try and balance it all while navigating a professional life, a personal life, finances and life in general,”

As a mother of three, Kathryn’s parental instincts recognised the difference that financial literacy could make in a child’s life.

She suggests the following tips to teach your preschooler about money:

You can already raise a money savvy kid from a very young age. Kathryn says parents can start the money conversation with their four-year-old by appealing to the child’s imagination. All children make believe when they play – whether they are saving the world or having a tea party with their imaginary friends, they use their imaginations to make sense of the world around them. This means that parents don’t necessarily have to buy expensive toys to teach them about money. Making fake money can do wonders in teaching your child where money comes from and how it is earned.

Here is an example:

Suggest an arts and crafts session to your four-year-old where she makes her own money. Use this as an opportunity to teach her about money so she takes a step towards understanding the inner workings of the real world. You can start with, “Did you know that money is made by the Reserve Bank?” And when they ask questions, fill in the blanks for them.

Remember to use statements that will evoke them to ask more questions. Here is a list to get your child interested: 

  1. Did you know that there are other types of money other than the one we use every day?
  2. Do you know how Mom and Dad get money to buy everything in the house?
  3. Do you know where we keep our money safe?

Hurling these statement and questions at your four-year-old while you make your fake money is a fun way to get them interested in the institution of money and get them to understand how money will be an integral part of their future. It’s your job, after all, to talk about financial responsibility with your kids.

Once you are done creating your new currency, you can start to explain the concept of money and how it is spent in the household by using your pretend currency as a physical substitute. Use the pile of notes to represent the money that Mom and Dad earn to ensure that the family has everything we need. Now list the family’s monthly expenses – this can range from groceries to entertainment, and draw from the pile for each. This shows how the family spends money monthly. You can explain how the remaining money from the pile goes to savings like the family holiday or her future education. Despite what many parents may think, children understand money because they are exposed to it every day either at home or when they are with friends at school.

Why its important to teach kids about money

“Studies show that 74% youth are not involved or included in the daily financial management of their household. However, results showed that children who are involved display a higher propensity to save, more cautious spending behaviour and a better understanding and knowledge of financial products,” says Kathryn.

 

View article on Living and Loving: https://www.livingandloving.co.za/family/importance-teaching-kids-money

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Why Raising Money Savvy Kids matters and the role Corporates can play

South Africa is drowning in debt. In fact, according to the Economist (2018), more people have loans than jobs.

We are some of the biggest borrowers in the world and our habits are increasing at an accelerating rate. So, why do we continue to pass this on from generation to generation; what if we could curb the ‘instant gratification’, ‘spend-now, pay-later’ mentality in our children from an early age?

Saving money financial management

Parents are the biggest influencers of children. They rely on us for life lessons, support, nurturing and knowledge, yet there is very little engagement in the household around savings, money and financial literacy in general. We live in a time of reckless borrowing and lending, and it’s up to us to teach our children that it’s not just as easy as ‘taking out more credit’.

Kathryn Main, Founder of Money Savvy Kids (MSK) says that the snowball effect continues to hurtle through South Africa and Africa as a whole.

“As if raising children in a tough climate isn’t hard enough, we now need to try and balance it all whilst navigating a professional life, a personal life, finances and life in general,”

As a mother of three, Kathryn’s parental instincts recognised the difference that financial literacy could make in a child’s life.  With a firm belief in the difference that raising money savvy kids could make, what started off as a passion project has evolved into a business and today MSK partners with various big corporates to develop custom financial literacy content – all developed by Kathryn’s full-service advertising agency, Main Multimedia.

“Some studies show that 74% of the youth are not involved or included in the daily financial management of their household. However, results showed that children who are involved display a higher propensity to save, more cautious spending behaviour and a better understanding and knowledge of financial products (Douglas Lamdin’s Consumer Knowledge and Financial Decisions: Lifespan Perspectives, 2011)” Kathryn continues.

With all this said, Kathryn explains that partnering with corporates not only in the financial sector but in broader sectors has become important. “It’s no secret that corporates have the power. When the system fails us, we look to those with resources and authority. Poor financial literacy follows us forever and we see society grappling with finances daily. It also makes us question what the future of Africa looks like,”

“We try our best to enable our future leaders by providing them with the best in-school education, but we fail them at home. Even the best schools lack in areas of financial literacy and it’s up to those with a bigger voice to make a difference” she continues.

A recent study on financial literacy in South Africa also highlighted the effect that poor education has on entrepreneurs, who now need to make responsible decisions to grow a business. Kathryn adds to this saying: “In a country that promotes and thrives on entrepreneurship, this is very concerning”.

By collaborating with corporates such as EXXARO, Woman’s Development Bank (WDB), Ischool Africa and many more, MSK creates custom financial literacy aimed at empowering and the educating the youth. “We tailor content to children as young as 4-years-old because it’s never too early to learn these lessons. We see so many parents focusing their time and effort on helping their children to get good grades, yet they forget about the issues that will follow them around forever; regardless of what grades they get,”

The youth are drowning in debt and interest from student loans. “They don’t understand the basics of credit scoring and so their credit score gets messed up. They can’t buy a car, a house or even get a cell phone to their name. So, they struggle along for 10 or 20 years, trying to get rid of the debt and improve their credit score often to no avail,” Kathryn continues.

“MSK promotes knowledge, attitudes, and behaviours amongst the youth to help them become financially independent. And as our mission statement says, we are set to empower the South African youth through financial training and awareness, creating the start of a financially educated youth era”.

Kathryn concludes saying: “We need to put the power back in their hands and turn these beautiful little people into responsible adults. It’s up to us as parents with the support of corporates to enable and empower the youth of today.”

View article on Entrepreneur Magazine: https://www.entrepreneurmag.co.za/entrepreneur-today/why-raising-money-savvy-kids-matters-and-the-role-that-corporates-play/

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5 Tips To Financially Survive Janu-worry

 

 

We all know the month of January is filled with countless unavoidable worries of the financial kind. Others may feel it more than others, but we all feel it non-the-less. We make our own lunch boxes again (that is exclusive to the month of January), we car pool to work and we stop buying coffee at that gourmet coffee shop on the way to work and instead make it ourselves. Basically, we go into level 1 of survival mode when it comes to our finances due to the crunch we feel. Here are 5 tips to get you to the next level of survival mode this Janu-worry.

 

  1. Know your credit rating

Your credit rating is like a meal ticket. If it’s good it will get you the best 3-course meal money can buy but if it’s bad, you can only get a single meal a day that is less than satisfactory. Your credit rating is information that lenders use when deciding if they want you as a customer. The higher your rating, the better your chances are at getting the financial assistance you need for all the important things in life. If you do not know what your credit rating is, there is no time like right now to get the information. By seeing your rating, you can see where you stand and recover if your rating is below par.

Find out what your credit rating is for free here https://www.clearscore.co.za/

  1. Get your debt under control

Do not despair if you are in debt and feel that there is no way out. Being under debt review will help you to deal with your debt proactively and with professional help. Debt counsellors deal with your creditors and come to an agreement that allows you to cover your living expenses while allocating the remainder of your available funds to your creditors on your behalf. You might not actually qualify for “Debt Review” but a Debt Counsellor can still assist you to work out a better monthly budget which will enable you to repay your debts effectively.

If you find you are over-indebted and need assistance visit Debt Counselling South Africa here https://www.debtcounsellingsa.co.za/dcsa.php

  1. Get on switching

‘Switching’ is the eighth wonder of the world, yet people never do it due to their loyalty (and because it takes forever to do). But you can cut down your expenses by hundreds of Rands when you actually stop being loyal to your current providers. A depressing fact is that companies typically give the best deals to new comers. Interestingly, the longer you are with a provider, the higher your premiums are likely to be. So, switch and not only get a cheaper deal, but a better one. Who doesn’t want car insurance, entertainment, or homeowner insurance for less?

  1. Start building an emergency fund now!

The budget may be tight this month but that will change as the year progresses. Building an emergency fund as soon as you can afford it is imperative. Things can and do change in an instant, including your financial state. So, having a financial safety net is the only way you can solve the issue without getting into unexpected debt in 2018.

  1. Create a budget

December is a busy month of over-spending. From presents to holidays, the meaning of the word “budget” gets lost in the rush to have a good time. Money is tight but the family’s needs must be met. Knowing exactly how much is coming in and how much is going out is the best start to reduce your financial woes. All you need to do is get all your financial records together and see where you can cut back without affecting the family’s necessities “basket.” And remember to add “savings” in your expenses column.

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Financial Lessons You May Have Missed This Black Friday

Cynics argue that Black Friday doesn’t teach your kids any life-long lessons they need to learn. Described by sceptics as a “capitalist consumption machine” that encourages consumers to spend till they drop- even if they are getting a steal on credit- is just one of the numerous shortcomings of the entire event. But what if we told you that you can take all the bad from this event and turn it to a lifetime of positive financial lessons for your kids?

Black Friday is the biggest man-made discount event of the year. Dare we say, it might just be better than Christmas shopping. Falling on 24 November this year, many had their wallets and shopping lists at the ready for the shopping trip of their lives. Happening over a minimum period of 24 hours depending on each retailer, one would view the event as a coming together of not-so-smart consumers spending money they do not have on things they do not need in record time. It isn’t the best example to set for kids due the emphasis on consumerism and irresponsible spending habits. But what have we learned from this year’s Black Friday extravaganza that we can take away with us? Here are the three major lessons that you might have missed in your rush to catch Black Friday deals.

Budget in advance. Black Friday just happened for the third year running this year. So, it is safe to say that it is going to happen again in 2018. Budgeting a whole year in advance is a great way to get your kids involved in the event. Including them in the process of budgeting by saving R200 a month for twelve-months in preparation for the event can teach them the benefits of delayed gratification. A budget also encourages kids to create a list of the essentials that they could not get during the year at a cheaper price.

Saving. Having a budget is one thing, but saving 20% of that budget after buying everything on your list of essentials will give your kids the zeal needed to continue the tradition into the following year. Getting them to donate that 20% they didn’t get to spend will be a bonus for them too. Having the foresight and practice to save 10% of your budget here and there is a nice way to get them to see that there is a reward for going the extra mile of finding the best deal possible by comparing prices.

Responsible spending. There is an enormous variety of products available on Black Friday. Retailers use the discount angle to get consumers through their doors and sales up. This makes the “logical consumer” within us disappear for at least 24-hours, only to re-appear when there is no money left to spend or are in severe debt due to overspending. This event just shows us as well as our kids what not to do in the event we can’t afford to go on a shopping spree. Its shows how easy it is to land into debt and serves as an example of how to avoid these traps for your kids too.

 

The biggest discount event on the planet is also the best way to teach your kids healthy spending habits as well as an alternative attitude towards money. Instead of campaigning for this one day to grind to a halt, use its downfalls as an incentive to teach your kids the financial lessons you never learned and help your kids lead a money savvy life.

 

By: Kgopotso Kgwedi

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Why Say Yes to Debt

Money Savvy Kids - Why Say Yes To Debt

After the 2008 global economic meltdown, many young adults remain wary about using credit. Of the 55-million people living in South Africa today, a minimum of 20-million are young adults. This is 20-million young and impulsive potential consumerism victims that are repetitively bombarded with dazzling commercials that offer a gateway into debt.

Either through offering ‘free’ R1000 vouchers when you open an instore account or influencing their consumers to blow R1000 or more – that they do not have – just to get R300 off purchases accumulated, retailers are out to make a profit by landing you into debt you do not need.  Advertisements lure you into needing something that you want. Due to the blurring line between needs and wants, the NCR (National Credit Regulation) found that ten million people in the republic find themselves in severe debt.

But Millennials seem to be struggling to avoid credit as best they can. A recent Bankrate survey conducted in the United States of America reveals that fewer than one third of people between ages 18 and 35 have a credit card. And as it stands, this is a record low percentage. In South Africa, however, people are financing their lives through credit. Whether it be buying necessities such as clothing and food, consumers are trapped in the vicious buy-now-pay-later cycle. Consumers conveniently forget that paying back the money later will come with interest attached. This ultimately means that consumers find themselves in a worse off situation when the next payday arrives.

Another factor keeping consumers trapped in debt is the process of building a credit record. Young people are especially at risk as it is a rite of passage to sail uncharted credit waters. To build a strong credit, financial institutions need to see that they are a responsible payer. To be able to buy that dream house or that car you have been eyeing since its release into the market, it is required to have been in debt at one point in the past and be on top of said debt’s repayments during the time in which you apply for a home loan at the bank.

Understanding the repercussions of getting into debt is a crucial skill for consumers to hone. This skill will allow for the x-ray vision needed to see the inner trappings of debt when it is offered in extravagant packaging known as advertising. So, spending that R1000 to get R300 vouchers leaving you in R700 debt will be a not so bright idea after all.

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Customer Education Through Financial Education

The customer education process of financial training is, in basic terms, flawed. Encouraging individuals who have reached economic maturity and are already set in their atrocious financial habits is equated to trying to build the world’s first time machine. Fundamentally, attempting to instill foundations that should have been laid during one’s youth will result in individual’s drowning into debt and, ultimately losing everything in the process anyway.

Whether we like it or not, money will continue to be a part of our human existence. Since the invention of currency, people have been trying to figure out how to best make, use and invest their earnings. Traditionally these individuals are classified as adults- normally 18-years and older. But recently, it is children that are being put first in the hope of training them for this age-old struggle. In a nation where close to 60% of its population do not know what the term ‘interest’ truly means, customer education regarding all financial lingo that accompanies personal finances must be equally imparted to the greater society. It is important to note that the single most crucial skill that can make or break one’s financial freedom is not taught in schools. Amazingly, one does graduate with a four-year degree and learn the equivalent of zero about personal finance or investing.

In an effort to save South Africa from being swallowed whole from debt alone, the Financial Services Board and Department of Treasury placed consumer education on the national agenda in 2010 and proposed a National Strategy for Financial Literacy. This called for a joint effort by industry bodies, the private sector and the newly formed National Industry Steering Committee (NISC) to address consumer credit skills relating to budgeting, financial planning, decision-making and understanding the cost and risk of credit.

Financial literacy for kids is fast becoming an indispensable market that lays groundwork for creating a financially savvy youth era. Clearly, children possess a lack of working knowledge of financial concepts and do not have the tools needed to make decisions most advantageous to their economic wellbeing. Due to this prejudice, customer education that is geared towards children, specifically, is scares to none. We at Money Savvy Kids strive to bridge this gap and provide content that is, in leman’s terms, dumbed-down enough for even a four-year-old to understand. Keeping in mind that the customer in this customer education process are children as young as four-years-old whose neuropathways are still developing, is a priority. We, as MSK, take this fact gravely as being at the helm of children’s development is a momentous and delicate process to say the least.

The visible issues of high levels of consumer debt and low saving rates creates a sense of urgency surrounding financial literacy for children. For parents to purely rely on the ‘unshaken fact’ that their children will learn all the invaluable knowledge and skill-set that is to allow them to make informed and effective decisions with their financial resources in their adult life from osmosis alone, just goes to prove that parents are living in a warped reality altogether. Financial literacy cannot be learned by simply reading the trusted 300-page user manual of yesteryear that is seldom fully understood or, if you are a follower of trends, watching a series of online videos in a single day. Achieving financial freedom is an ongoing process that involves every financial decision one makes throughout their lives. Even that first time your child buys sweets with pocket money that they have earned from doing chores around the house.

MSK truly wants to position our youth for success. Providing content that has been formulated to improve consumer behaviour from a young age by enhancing and increasing levels of knowledge, awareness and borrower confidence so that consumers can make more informed decisions when borrowing or applying for credit as adults is what we do. Financial literacy is nothing new. What is new, however, is how MSK imparts content to students. MSK teaches content through ‘teachable moments’ relevant to the specific life-stages of an individual’s life. These ‘teachable moments’ may range from taking out a student loan or buying a home. Consumer education structured around these moments are the most effective method to consumers understanding financial concepts such as credit and investing.

Customer education does not only depend on the ‘consumer’. It is also the responsibility of financial service providers, both public and private, to assist in responsible lending practices that will ultimately empower consumers and aid in economic development. These efforts can have a positive impact on the way people think about and behave towards personal finances. Let MSK help the children of our nation write a finance success story that will have them enjoying a money savvy life.

 

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Saving versus paying Debt

Taking initiative to save and pay off debt is not straightforward. But which do you do first? Both are vital to the stability of one’s personal finances. Doing both in varying degrees may be a gamble worth taking.

One of the biggest myths that society buys into is the myth that saving up is more important than paying off debts. Living in nation that boasts extremely low figures of savers and immensely high figures of indebted consumers, South Africans are in need of some intervention. Money Savvy Kids (MSK) is here to give them the jolt needed when it comes to finances.

One thing no one has told you is that the cost of debt is usually much higher than the benefit gained from saving. This isn’t to say that you should not at least have an emergency savings fund. This fund should contain about three to six month’s worth of living expenses so you can be prepared when disaster strikes. Resolving to pay the minimum payment may also have to be a thing of the past as well. Reducing your debt by paying more than is required will ultimately translate to your pocket getting back its jingle a lot quicker than it would if you were to save all your money. In effect, prioritising paying off your debt is the first crucial step you need to take in order to be able to effectively save in the future.

Identifying which of your debt is costing you the most is just as critical. Whether the debt in question is R1000 or R10 000, the differentiating factor here is the amount of interest charged on a monthly basis. The debt charging the most interest should be paid off as quickly as possible. By making the conscious decision to pay off your most expensive debts first, you will be at a bigger advantage when you do start saving for retirement.

While the majority of people do not ever rise to a point of complete financial freedom in their lifetime, some manage to break the mould. This can only be done by harnessing financial intelligence. Financial literacy is the cornerstone to financial prosperity. It builds confidence and knowledge in the lives of individuals and the country as a whole.

MSK is a financial literacy program for children as young as seven. The programme is rolling out its in-school curriculum in March 2017. Not only does MSK effectively instil in them the skills and foresight to correctly manage their finances, it also equips them with entrepreneurial skills. Equip your child today so they can enjoy a money savvy life tomorrow.

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Budget for the Holiday season

South Africa is a buy-now, pay-later society. The effects on young people’s financial literacy are thus characterized by the same behaviour patterns as parents and society. These are high credit and high consumer behaviour with very little savings, and in turn high social risk behaviour. Money Savvy Kids(MSK) is working to change this disastrous pattern

Per the National Credit Regulator, about 10.3 million South Africans are finding it difficult to meet their monthly debt repayments. Octogen, which specialises in financial wellbeing, reports that in 2016 the average household spent a massive 49% of after-tax income on monthly debt repayments making it ‘difficult’ to ‘impossible’ to keep up with their debt repayments.

Far too many South African consumers go into the festive season saddled with debts they can’t comfortably repay, and with little or no savings and after a holiday spending spree, end up even worse off in the new year.

MSK is not just a product. It is a pathway to developing mind-sets that will ensure South Africa’s children not only work their way out of poverty, but that they have the tools to stay out. On that note, we are offering tips to smart spend this holiday season and have a no worry start to the new year.

  • Set a budget for holiday season expenses like presents, gifts and entertainment
  • Budget for January expenses like school uniforms and stationery and do your back-to-school shopping before your holiday shopping.
  • Don’t spend what you don’t have! Don’t shop on credit
  • Gifts are a huge expense. It takes courage not to overspend! Work out some guidelines around buying gifts with your extended family. Once you know who you are buying for, budget an amount per gift, and stick to it.
  • Don’t be tempted to buy anything other than what you’ve budgeted for. Avoid the impulse purchase!
  • Keep in mind the old cliché that it’s the thought that counts. Something small and personal, something homemade, or even a heartfelt card, will be well appreciated.
  • Spend time with friends and family, for instance. If you’re a highly social person, it’s tempting to play host all season. You can just as easily be the life and soul at someone else’s party!
  • If you are entertaining, don’t be afraid to ask your guests to contribute. Ask each guest to bring along a salad or contribute a dish, and everyone should bring their own drinks.
  • Making your own decorations (or swapping old ones with friends and family) can reduce costs and be a lot of fun for the whole family.

With a bit of planning which involves budgeting and a lot of smart spending you will step into 2017 debt free and maybe even with a little bit of extra cash in the bank!

Start planning now and smart spend, and live within your means !

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