“In my interaction with children of different ages and backgrounds all around the country‚ it is clear that some parents may unintentionally be teaching them bad money habits‚” says Eunice Sibiya‚ head of consumer education at FNB.

“While we all want what’s best for our children by ‘protecting’ them from the world of money‚ this can also be detrimental to the way they handle their finances later on in life.”

Are you unintentionally teaching your kids bad money habits by making these common mistakes?

Creating a money shield

 “By shielding your child from how finances work you are unintentionally putting them on the back foot‚” says Sibiya. “Introduce them to simple money concepts as soon as you can.”

 If they are fairly young you can get your child to pay for something in the queue and also help them identify the difference between a want and a need.

 “Older children may even have the ability to grasp more complex concepts such as compound interest or credit‚” says Sibiya.

 You don’t need to go into detail but can simply show them that they will be paying more for the same item if they buy it on credit.

 Conversely‚ this is a good time to teach them how interest can work in their favour‚ because if they put the money in a savings account not only will they be able to pay for the item in a few months‚ but they will also have a bit more money to spend on something else that they like.

Not giving them control

 “By giving your child some measure of control over their own money you will be empowering them to make important financial decisions‚” adds Sibiya. “Set up a bank account and‚ under your watchful eye‚ let them make their own transactions such as airtime purchases or swipes.”

 They will soon learn about fees‚ and how some transactions‚ such as electronic transactions‚ are better for their bank balance than say‚ withdrawing cash.

Not allowing them to make their own purchases

This falls into the same category as not giving your child control; it is easy to simply buy something for your child outright‚ or tell them you can’t afford it and move on if you are in the store. But‚ stopping and making your child think carefully about their purchase will put them in good stead for the future.

 “If your child points to something they really want‚ make them weigh up the options of purchasing it by asking if they can afford it‚” says Sibiya.

 They will have to consider how much money they have put away and whether the cost of the item is worth it.

 “You can help them come to a decision or gently steer them if they look like they will blow all their money on a plastic action figure‚” says Sibiya. “But the point is that if they have blown all their cash on something the previous week‚ they won’t have money for something they really want and that is how real life works.”

Too much pocket money

 Giving children too much pocket money can be detrimental to future good financial behaviour.

 “In some of the schools I have spoken at‚ children are given R50 every single day‚” says Sibiya. “They aren’t in the habit of saving it so they feel that they must finish the money every day as they will be getting the next cash injection tomorrow.”

This is not how the world works.

“Discuss with your partner about how much is a reasonable amount for pocket money. Most importantly‚ encourage your child to save a portion of it‚” says Sibiya.

Teaching bad habits through your own actions

 Children often learn bad financial habits through the actions of their parents. “If we as parents demonstrate good savings habits and even better spending habits on a daily basis‚ our children will be educated through our actions‚” says Sibiya. “It is not only about what we teach‚ but also about what we do‚ that will mould their behaviour.”