Creating generational wealth, and more importantly, doing so with your children side-by-side, is one of the most crucial steps to expanding one’s legacy.

That journey begins with teaching your children about money and creating a healthy money relationship with them.

And in a country like ours, South Africa, where its financial literacy levels were ranked at 42% in a survey conducted by the Organisation for Economic Co-operation and Development (OECD), the huge lack of knowledge in money matters plays a huge role in our ability to build generational wealth.

And with many adults trapped in a cycle of misinformed money decisions that trickle down generations, it is never too late to rectify this defect, especially with our own children’s financial advisor, Mmathapelo Banda.

“I work with a lot of people from black communities, and the one common thread is how we are not taught how to grow our money, how to handle money, and how to make money work for us. How to save money, but not only save, but how to invest our money,” she said.

This lack of money illiteracy has, in turn, created a very toxic relationship with money that is handed down from generation to generation.

Financial advisor Mmathapelo Banda

“But the truth is, you can literally create wealth without having to go through shortcuts and with the little that you have. That basic R500 is the start to reaching your goal of financial freedom,” she adds.

Banda shares that there are two types of mindsets: those who are better placed to make financial decisions that will ensure that their children don’t work a 9-5 and start ahead, and those who are just getting started and become big spenders.

“The latter are the type that aim to please their inner child and are more impulsive when it comes to money—don’t really think about wealth now—but are more focused on instant gratifications,” she adds.

But with generational wealth in mind, whether one is at the starting line or in the middle, involving our children so the wealth is maintained is a really crucial step to take.

“You can’t build wealth without going back down to the ground. And those foundational building blocks become the lessons that you teach your children. For example, if you can teach your child to save, it doesn’t matter how much that is; and you as the parent double it, you are not only instilling the knowledge and appetite for saving, but also  teaching them lessons on investment.

SOURCE | Freepik“By doing so, you teach delayed gratification; you teach them that in order to get something, you need to work a little harder,” shares Banda.

But in instances where parents don’t have that extra change to enforce the above-mentioned money lesson, not all is lost.

“So in the Jewish culture, when a child turns 13, they are considered an adult. And because of that, they are now expected to learn about and make money, and you need to know what we, your parents, do with money. Borrowing from that, I believe that involving your children in money matters is another step to educating them. Even if we don’t have money, your child’s brain will now start to think strategically about how to make what you have work and, therefore, always be cognizant of the realities of money,” adding that this move is not to add stress to them but more of a nudge to say “do better than me.”

And in a world where a lot of secrecy has been built around money, this huge leap of trust will not only boost their confidence, but from an early age, they will understand the complexities of money.

SOURCE | Freepik

It all boils down to a healthy relationship that you build with your children. This will ensure that lessons stick and are valued, rather than brushed off.

“I do absolutely believe that it (generational wealth) heavily involves our children, but it also starts with allowing your kids to be themselves. When I speak to teenagers, I realize that a lot of parents try to live their dreams through them, and that causes children to rebel, which results in bad relationships being forged. They take it as if you are trying to control them.

“So investing in their dreams will encourage a healthy relationship. And from their passions, one can start teaching them the small, basic steps of business—that will actually lead to generational wealth,” adds Banda.

Follow Mmathapelo on Tiktok for more financial advices by searching – Wealth Creation with Thapsy