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3 ways to break the bad financial habits you have inherited


Show kids the importance of saving from an early age, through paying them a small allowance, giving them a piggy bank or opening a bank account for them. Picture: File

When we think about our heritage, we might imagine the parts of it that include food, culture and history, however, an important aspect of our heritage that is often overlooked is how we handle our finances, says Naledi Totana, compliance officer at National Debt Advisers (NDA).


From a young age, children observe the relationship and experiences that their parents and grandparents have with money.


This can influence how children view and manage their finances, and they may - without realising it - pick up these engrained “historical habits”.


The attitude that parents have about money certainly shapes the way their children think about it, says Nelisiwe Mbara, financial planner at Alexander Forbes.


“Teaching positive money behaviour from a young age helps to create a lifelong awareness of money-savvy attitudes and behaviour,” adds Mbara.


According to Totana, recognising the “inherited” traits that hinder financial growth is key and It’s never too late for young people to change those behaviours.


“It’s also our responsibility as parents to model sound financial behaviour and instil positive habits in our children, so that they are free to build wealth, and are not plagued by financial difficulty,” Totana said.


Here is what you need to consider when it comes to our inherited financial habits:


Financial literacy


Totana says parents should ensure they take the time to teach their children basic financial concepts, such as saving, budgeting and credit. "Before they can learn good financial habits, they first need to understand the value of money and why it should be handled with care."


If your parents never taught you this, make it your mission to read up as much as you can about it. The internet is full of good literature and social media has byte-sized vlogs of wisdom. One of the most debilitating things in a grown-up world is to be financially illiterate.


Added to that it is important for parents to understand their finances and invest in safeguarding their future with things such as insurance and retirement savings so their children can be financially free of caretaking later in life.


Good financial habits


“Remember that your children not only listen to what you say, they see what you do. Therefore, if you want them to practice good money habits, you need to set the example,” Totana says.


Parents can do this by:

– allowing children to sit with you when you draw up a simple household budget; – help them identify the difference between a luxury (want) and a necessity (need) when you do your grocery shopping; and

– show them the importance of saving from an early age, through paying them a small allowance, giving them a piggy bank or opening a bank account for them.

Not all young people have this good example. The best thing you can do as a youngster if you don’t have financially literate parents is to learn from peers whose parents may be more financially literate - and who may be happy to mentor you. In this world of YouTube and podcasts there are also world renowned advisers freely imparting knowledge. Learn as much as you can.

Difference between good and bad debt


Parents need to know the difference between good and bad debt so they can pass on this knowledge to the generations that follow.

James Williams, head of marketing at Wonga, says good debt allows an individual to manage their finances more effectively, “to buy things they need or to handle unforeseen emergencies, or to acquire larger and more capital-intensive assets, such as property".

Examples of good debt include taking out a bond for a home or investing in oneself by borrowing to further an education.


“A bad debt is a sum of money that has little or no prospect of being repaid timeously or puts too much financial stress on the borrower who is unable to repay it as they originally agreed,” Williams says.

“Bear in mind that whether debt can also be classified as ‘good’ or ‘bad’ is also down to affordability. Yes, a house is an investment, but if you cannot comfortably afford it, it might cause you severe financial stress,” Totana adds.

If parents are in debt they need to recognise the problem and seek the help of a qualified debt counsellor, who can help them structure a debt repayment plan.


“There is no shame in this and taking ownership and responsibility for debt is also positive behaviour that you will model for your children,” says Totana.

‘’Learning new habits and passing these on to our children will be a key part of changing our country’s collective heritage for the better.”

Knowledge is power, and who says children themselves can’t mentor their parents with what they learn. Heritage goes both ways.


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