Put the fun back into family finances

Published on 31st March, 2020 at 04:32 pm

All it takes to successfully save and manage family finances is some creativity! Get everyone involved, including the kids, teens and grandparents, with these fun tips.

Family finances tip #1: Put savings first

For the kids
According to a study done in 2013 by the University of Cambridge, money habits in children are set by the time they turn seven. This means it’s important to instil a healthy financial ethos before your child starts their schooling. Pocket money and money gifted on birthdays and other special days can be saved in a piggy bank, or you can offer to keep it safe for them.

Create a culture of saving by helping kids identify something they’d like to buy. “Make sure that it wouldn’t take too long to save for, so that they don’t lose interest,” suggests Danelle van Heerde, head of advice processes and tools. “My kids loved Lego and would save pocket money and birthday money to buy a set,” she shares. Help track their saving towards the goal amount, then go along with them to the shop to guide them in selecting and buying the desired purchase.

There are many child-friendly money management apps that will help your kids budget and reach their savings goals. Ensure you’re doing the right thing when it comes to teaching your kids about money by avoiding making these common mistakes.

For the teens
By the time they enter the double digits, your children will want more autonomy when it comes to managing their money. This is a good opportunity to introduce them to budgeting, identifying wants versus needs, and managing their income and spending.

“Help them create a budget for their pocket money and determine which things they are responsible to pay for,” suggests van Heerde. “Split it into needs (toiletries and airtime) versus wants (going out with friends),” she adds. Now is a good time to introduce a bank account for them to manage, too. “Let them take control over their pocket money,” says van Heerde. “They can use it to watch their savings accumulate.” It also helps to encourage them to stick to these goals by putting up a picture of what they’d like to buy in their room, serving as a vision board to keep them inspired.

There are other tools available to help them calculate what they need to put away each month to reach their savings goals, like this easy-to-use savings calculator.

For the parents
“It doesn’t matter how old you are: making a savings goal ‘real’ makes it easier to stick to,” encourages van Heerde.

Take retirement, for example. Instead of simply saving for expenses that you’ll have to cover when you’ve retired, try to paint a picture of where you’d like to retire, and how you’d like to spend your time. This handy tool will help you plan for your retirement and earn you tier points, too.

We’re also here to give you benefits that make saving easier.

For the grandparents
“It may be tempting to use your retirement funds for holidays or home renovations, but without a proper understanding of your financial situation, this may lead to serious problems later in your life,” cautions van Heerde.

Even once you’ve reached retirement, saving should still be a priority. After all, you’re still responsible for ensuring your basic income needs are covered, and that holidays and treats for the grandchildren are accounted for. With the extra free time available for these nice-to-haves, it’s imperative that the saving continues so you can truly enjoy your golden years. Here are a few tips to help boost your retirement savings.

Family finances tip #2: Empower each other

If you have family members who are largely dependent on you for covering basic needs, stepping in to empower them financially will help alleviate pressure on you, and set them financially free.
“Help them understand their financial situation and why they regularly need help, for example, do they not have an emergency fund or insurance?” suggests van Heerde. “Look for missing items [in their budget], and encourage them to think about their savings goals – do they need to build up an emergency fund, study further so that they can get a higher paying job, or save for retirement?” she adds.

Get them started with this budgeting guide.

Reality Club or Reality Access for Sanlam Group Risk members can help save even more via their benefit: free monthly discount coupons to redeem at Shoprite, Checkers and Checkers Hyper.

Family finances tip #3: Save better together

It’s easy to get caught up in the excitement of packing bags and hitting the road or the skies for a well-deserved break, but before you do, be smart about saving for it. Spot the opportunity to teach younger members of the family by getting them involved and invested in your getaway.

How the younger kids can help
“Encourage kids to save for their own spending money before the holiday,” suggests van Heerde. “Decide together what you can give up to build up holiday funds, for example, no takeaways for a month.” Look at saving on entertainment too, like getting discounted Nu Metro movie tickets as part of your Entertainment benefits (Reality Club, Core, Plus and Health members only).

How the older kids can help
“Involve them in evaluating holiday options, considering things like relative costs and types of activities available,” suggests van Heerde. There is a key learning hidden in this that they can apply to other budgeting exercises in their lives. “When looking at costs, don’t focus on affordability, but on whether this is the best way to use your money. Although you should not spend money on something you cannot afford, being able to afford something does not mean that you should spend money on it.” Put their internet skills to use and involve them in researching different options that would appeal to each family member, suggests van Heerde.

Are your kids working already? Be sure discuss financial responsibilities and activities that your kids will have to own to “avoid different expectations, like the kids thinking it is a free holiday sponsored by you, creating conflict that spoils everyone’s fun,” cautions van Heerde.

Family finances tip #4: Reward yourselves

Get kids into healthy money habits by teaching them the true reward of saving, for example, “for every R1 they save each month, you add another R1 to their savings,” suggests van Heerde.

Teaching a sense of self-control is an important lesson for kids, revealing that the shorter route to gratification isn’t as rewarding as the long-term benefits which is in your best interest.

If you’re not sure of how to tackle planning your finances with long-term goals in mind, speaking to a professional will open up a world of knowledge. “Get an objective party, like a registered financial planner, to help you make better decisions.” Book a meeting today to get yourself on the road to a financially rewarding future, here.

More tips for forming the right rewarding habits for financial success:

• Use automatic debits from a bank account to avoid having to make the choice between spending and saving on a regular basis.
• If one person in the family is better with saving, put them in charge of savings and investments on behalf of the family.
• Reward yourself for saving – for example, for every R1 000 saved towards your retirement, you can spend, say, R100 on little luxuries (make sure this works with your budget). The Sanlam Money Saver credit card can also help you save without even thinking about it – rewarding you by adding up to 5% of everything you spend to a dedicated Cash-back Bonus. T&Cs apply.
• Understand the situations that lead to unplanned spending – if your weakness is shopping when you spend your ‘me time’ at the mall, find an alternative activity or way to treat yourself.

Take charge of your family’s finances and secure their future with an expert by your side to help make important decisions when it comes to your money. Book a meeting here.