National Teach Children to Save Day may have come and gone, the imperative to instil good saving habits in children from a young age remains as urgent as always. That’s according to Dr Frank Magwegwe, Executive: Financial Wellness and Advisory at Nedbank, who emphasises that developing these good money habits early on creates a foundation for a lifetime of saving and helps to prepare children for a solid financial future.
Dr Magwegwe points out that this is particularly important given the increasing financial challenges that South African consumers face today. In recent years, South African consumers have faced growing pressure on their household budgets due to relentless increases in the cost of living, driven by a combination of rising inflation and interest rates, increasing petrol and electricity costs, and rampant food price inflation. This financial strain makes it challenging for many, particularly those in lower-income brackets, to find the money to save.
However, he says that the lack of a savings habit is not restricted to low-income earners in South Africa. “It’s very much a mindset that has evolved in our country over the years – so even those with sufficient disposable income to save typically tend not to save enough of it,” he explains. “What is needed is a shift in the savings culture in our country where saving becomes a habit. But as we all know, developing a new habit as an adult can be challenging – and that’s why it is so important that we, as adults and financial institutions, make it a priority to inculcate that savings habit in our nation’s children from a young age.”
Dr Magwegwe points out that saving is a skill that needs to be taught and learned, just like any other life skill, and he says that recognising that the knowledge of how to save doesn’t miraculously happen when we become adults is the first step towards ensuring that we take the financial and savings education of children seriously.
He points to the humble piggy bank as one of the most effective foundations for this education. “Children as young as six or seven years old can comprehend the basics of how money works and understand the concept of saving,” he says, “so parents can use simple savings vehicles like piggy banks to start imparting basic money management lessons, teaching their children that when they receive an amount of money, they have three options: spend it, save it, or share it with others.”
He says that taking children shopping and using it as a teachable moment is another valuable approach. Explaining how credit or debit cards work and using bank rewards cards, Like Nedbank Greenbacks, to demonstrate how they can save money by earning cash or cash equivalents back can be powerful in teaching children about money and how to make the most of it.
Dr. Magwegwe also emphasises the vital role that schools need to play in financial education. “Parents and financial institutions need to lobby education departments to make financial education a core component of what children learn at school,” he says, “and the financial services industry should collaborate more with education departments and other organisations to make financial education accessible and understandable for young South Africans.”
He explains that Nedbank has taken significant steps in this direction by building financial education tools and programmes specifically aimed at young South Africans. The StarSaver programme developed in collaboration with the Banking Association of South Africa is one good example of this; but he stresses that banks need to do even more to meet kids where they are – particularly in the digital world.
“Nedbank recently did this with our launch Chow Town, an engaging game in the Roblox metaverse designed to nurture entrepreneurial and financial management skills,” he says. “The game integrates lessons on budgeting, investing, and financial decision-making, equipping children with the knowledge to make informed choices about their money as they grow older. It also stimulates their interest in entrepreneurship by presenting them with real-life business challenges within a fascinating virtual world.”
“Financial education is crucial for the future of our nation’s children,” Dr Magwegwe concludes, “and by working together as parents, educators, and financial institutions, we can, and must, create a generation of financially savvy individuals who understand the value of saving and are prepared for a solid financial future.”