Teaching your children to save and invest is one of the most important life skills you can give them to prepare them for the future, especially since South Africans are not known to be good savers and investors.
It’s up to parents to teach their kids to do better in the culture of spend, spend, spend, but what’s the best way to do that? Franc, the award-winning app that helps South Africans save, invest and learn about investing, has now developed child accounts that parents can connect to.
It takes a few clicks to open an account and then a few more seconds to open your linked child’s profile and all you need is your child’s birth certificate. You can also lock your account for a certain period of time to remove the temptation to use the money for something else.
Dr. Thomas Brennan, founder and CEO of Franc, encourages parents and families to stop giving other children silly toys and prefer useful gifts, such as gifts of compound interest by starting to save and invest early for children.
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Help children to invest instead of buying toys
“When the next birthday comes and people ask about what to get your child, you can let grandma, uncle and friends pay small gifts into the account using the child’s reference when depositing.”
The account can be funded by stop order, one time deposit via EFT or instant EFT or even directly from the parent’s own Franc account. Brennan says this is the best way to let your child see the benefits of long-term savings in an investment account.
Consumers are often intimidated by the complexity of investment products, but Franc has minimized the complexity by limiting investment options to just two funds, the Allan Gray Money Market (cash) and the Satrix 40 ETF (stocks).
The Allan Gray Money Market Fund available on the app has provided a return of around 5.2% over the past 12 months and the Satrix 40 ETF has returned an average of 10% per year over the past 3 years and an average of 9.2% over the past year. 10 years.
There is no minimum investment amount required and you can withdraw money at any time without penalty, while the fees are low and transparent and it is easy to check how your investment is in the application.
If you still hold the bonus, you can also deposit it in Francs to save for various purposes, such as your child’s education, a family vacation, or your child’s first car. You can also add a child care worker, domestic worker, or gardener and start a savings account for them as well. Another benefit is that Franc offers simple educational content to help improve your financial knowledge.
If you don’t really trust the application, you will immediately be able to invest from the Franc web portal.
Franc was created to make investing very easy and affordable and to ensure that, in just a few minutes through the application, anyone can invest for themselves or their dependents in cash and equity funds with no minimum investment and no paperwork.
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Tips to teach your child to be smart about money
Brennan shares these tips for teaching kids to be money savvy:
- Teach them how much everyday things cost and get them involved in making shopping lists and sticking to budgets.
- Encourage them to use their pocket money to buy special items, such as certain toys.
- Introduce the concept of interest on saved money and show the benefits of consistent long-term savings by opening an investment account where you can see the interest earned.
- Get your kids involved in planning family events and vacations on a budget.
- Entrepreneurial discussions at the dinner table can involve successful people and what they did to achieve success. Brainstorm creative business opportunities and how failure can help you on your way to success.
- Be a role model for the behaviors you want to emulate, such as living below your means, special shopping and not giving credit.