You have a debt solution in place which is taking care of your immediate financial problems – that’s great! Thinking about growing your wealth may still be a distant thought. It is important that you build a financial plan in addition to your debt solution to put you on the road to financial freedom.
23 September 2015
Heritage Day (also known as Braai Day) is an opportunity for South Africans to celebrate their culture and diversity of their beliefs and traditions. On this day we can reflect on the values, traditions and the legacy we pass on to our children but Wendy Monkley, Head of Marketing of DebtBusters, South Africa’s largest debt counsellor, is also encouraging South Africans to think about the financial habits and lessons they want to pass onto their children.
“Spending habits, whether good or bad, often get taught and passed on from parent to child. Ask yourself this Heritage Day, whether you’ve been a good example to your children when it comes to the money habits you practice.
Remember that it’s not always what you say but what you do that counts. While you may be encouraging your children to save you may be sending them a different message by using your credit card at every opportunity. Such actions could speak volumes about your financial habits and set a bad example,” warns Monkley.
Monkley feels it’s critical that the subject of money be addressed in some way and that National Braai Day may be one of the best opportunities to convey the lessons parents have learned in a relaxed manner. “Perhaps while you are having a beer and turning the boerewors on the braai you could raise the subject of money and debt with your children and talk to them about some of the mistakes and achievements you’ve made.
“If you’ve been good with money, it’s important to relay those saving milestones to your family too. Teaching your children the value of waiting and saving for something they desperately want is a very good thing to pass on this Heritage Day,” added Monkley.
Monkley highlights five bad money habits that you should avoid passing on beyond Heritage Day:
Showing them that the budget doesn’t matter
Do you regularly make impulse purchases and use your credit card often while telling your kids that you can’t afford something? This sends mixed signals. This will tell them it’s OK to spend money, even if they don’t have it.
You compete with your friends and peers
It’s difficult not to spoil your kids when you find out that a neighbour’s child has an item that your child desires too. But giving in and running out every time you find your child lacks a certain toy is sending the wrong message.
You’re not transparent when it comes to money
If you are having trouble with money and are in debt it’s important that you convey this to your family. Perhaps on Heritage Day you can talk to your family about your ‘get out of debt goals’ and how you will achieve them. Getting out of debt can only be achieved if you have the entire family on board with your plan. If you keep it a secret, children will believe everything is fine and won’t take you seriously if you say you can’t afford something. Also, children are never too young to learn about money and money problems.
Using credit and store cards on a regular basis
The interest rate on credit and store cards is exceptionally high. Rather use your debit card for things like groceries or clothes. Teaching kids that a store card is an alternative to there being no cash in the bank is the wrong way to go. This is how the cycle of debt can be passed on.
Saying ‘yes’ all the time
Kids do deserve to be entertained. But entertaining them can add up and cost a lot of money. If you are scaling back on your entertainment because you are struggling with debt but you are still paying for children to have all the extras like expensive holiday camps or sports then you are not teaching them about cutting down on luxuries when times get tough. This will just teach them that they only need expensive toys and activities in order to have fun.