Teaching children about debt can help them avoid common pitfalls when managing their money as adults. It also promotes financial literacy.
We ask three South African parents about the lessons they’ve shared with their children about debt.
Tip: The right debt solution can help you get your finances back on track. Find out about debt consolidation.
“Debt is a noose around your neck”
The only thing 74-year-old businessman Ronnie Govender has taught his children about money is that if they can’t pay cash for what they want, they should assume they can’t afford it.
“I don’t believe in incurring debt, and I have a credit card for emergencies only,” he says.
“Throughout my life, I’ve paid cash for everything I own, except my two homes. Both bonds on my homes were small and I paid them off within the allotted time.”
Ronnie says his own father taught him that “debt is a noose around your neck” – and he’s teaching his children the same thing.
“I’ve impressed on them the value of saving for what they want, be it a birthday gift or a car,” he says.
“In a world of instant gratification, it’s difficult to learn this lesson – but it’s the most valuable one to teach.”
“I tell my children not to be like me”
Michelle Robbens, a 38-year-old hairdresser, has spent much of her life in debt. The situation was especially bad during the Covid-19 lockdowns, she recalls. “I had very little work and our debt grew," she says.
“My kids have watched me struggle to repay debt and they’ve also seen my regret when I bought on impulse on my credit card,” she adds.
Michelle says she has taught her children that “debt is the enemy”.
“I’ve told them not to be like me. The most important thing is to have a good education and work towards having a job that will allow them to live comfortably.”
Michelle worries that her daughter will have to take out a student loan to fund her law studies, but says she has reminded her that she’ll have to pay it back as quickly as possible.
“I hear stories from family members and friends about how they struggle to pay back student loans they took out almost a decade ago,” she says. “I don’t want that for my kids.”
Her children are learning from her money mistakes, Michelle believes. “They already know how to make better decisions than I do,” she relates.
“I want my son to be independent”
Clarity Cele, a 42-year-old shop assistant, said she hasn’t been able to teach her son much about money, as the family lives from one month to the next. However, she’s opened a bank account for him and puts money into it every month.
“He and I have spoken about how this money will help him in the future, so he can study further and buy the things he needs,” says Clarity.
“I don’t want him to borrow money and get into debt – I want him to be independent.”
Clarity says her son works on weekends to earn his own pocket money. “I hope this will teach him it’s important to work hard,” she says.
“He has friends who talk about branded clothes and fancy cars. He once asked me if we could open an account so he could buy clothes, and I told him that type of debt isn’t good. I hope he understands what I mean.”
Tip: Responsible debt management helps keep your credit score in a healthy range.