Empowering the Youth on financial matters
Vol I Issue 1 FREE
South Africa June 2011
Li gotjwa li sase manzi What SASI has to say about saving
Education Vastfontein Community Transformation
Guilty as charged Teach your children the value of money
OOdles magazine is a free supplement brought by WealthWise magazine, your guide to wealth creation and management!
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9 Parental Advice Guilty as charged!
Motivation Courage to succeed
6 Interview
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SASI: Li gotjwa li sase manzi
Education
It is never too late
Vastfontein
or early to start
Community
saving!
Transformation
Regulars 3 Contents
4 Foreword
16 Life and Business Dream to reach your goals
5 Contributors OOdles 3
Welcome to our June supplement: OOdles! In our March edition of WealthWise magazine we have explored the psychology of the next generations to come (Beyond Generation Y), we have praised some of our young business talents (Young Entrepreneurs) and talked about why a good financial education is necessary since early ages (Daddy, are we rich?).
Following the initiative of bringing out more useful tips, advice and encouragement for our youth, we have put together a June supplement dedicated to children, teenagers and their parents. The June supplement not only celebrates Youth Day and our future country’s leaders, but strives to educate children and parents alike on the principles of saving, investment, career and business, for a better start in life. In this first issue of OOdles magazine, we chatted with the South African Savings Institute (SASI) on their mission of educating youngsters about saving, we asked a financial planner to tell how should parents teach their children about money management (and we learned about parents’ biggest mistakes) and we brought in some motivational advice on success and achieving goals. Finally, WealthWise magazine and its June youth supplement, OOdles, will continue to work towards informing, educating and empowering South Africans to live better, wealthier lives. For these purposes, we have featured the educational initiative Vastfontein Community Project in this issue and we hope to regularly update our readers on such brilliant programs. We hope that OOdles magazine will inspire you to make every day, long lasting changes to a wealthier future for all of you and your children. All the best,
Denisa Oosthuizen
Publisher WealthWise magazine
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WealthWise
magazine
OOdles June supplement Publisher/Design REO Media Solutions
Mirinda Laurens is a Certified Financial
Planner (CFP) and Corporate Financial Services Managerat Consolidated Financial Planning. She heads up Corporate Solutions within Consolidated and has 20 years experience in the financial services industry. Mirinda is also a member of the FPI. Read Mirinda's parental advice on teaching children the value of money in the article Guilty as charged!, page 9.
Managing Editor Denisa Oosthuizen denisa@wealthwisemag.co.za editor@wealthwisemag.co.za Contributors Mirinda Laurens, Nikki Viljoen Sales and Marketing denisa@wealthwisemag.co.za Distribution www.wealthwisemag.com Copyright All content and information within WealthWise publication is property of the Publisher and should not be reproduced, copied or entirely quoted without the prior approval of the Publisher, being protected under copyright laws.
Nikki Viljoen is an Internal Auditor and
Business Administration Specialist and owner of Viljoen Consulting. She is passionate about assisting SMME’s to grow sustainable businesses, teaching basic business practice and blogging about business, success and motivation. Read Nikki's contribution for Oodles magazine on pages 11 and 16.
Should you wish to make use of any of the content displayed please contact us at denisa@wealthwisemag.co.za or editor@wealthwisemag.co.za.
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SASI: Li gotjwa li sase manzi It is never too late or early to start saving! by Denisa Oosthuizen
Parents, teachers and educators should have an essential role in teaching children the basics of good financial behaviour, starting with the number one good habit of saving!
OOdles asked Monica Monye, project assistant at the South Africa Savings Institute (SASI), to share with us the Institute’s relentless mission, their involvement with children and communities and some useful advice on savings for both parents and children. Here is what the Institute has to say! OOdles magazine: Tell us about the South Africa Savings Institute’s mission and community involvement so far. SASI: The South Africa Savings Institute is an independent non-profit organization that was established in 2001, dedicated to the development and delivery of programs that encourage growth in the level and rate of saving among South Africans. SASI’s vision is to secure a sustainable growth in the national savings rate, thus enhancing the financial health of the nation and the well being of its citizens. OOdles magazine: How can SASI involve the younger generations in supporting its mission? SASI: We are in a process of selecting volunteers in each province to be mentored and trained in the concept of saving and money management, so that they can take these lessons to other young ones and the community at large. We believe that if the lesson is from someone the community can relate to, it will be of better value. OOdles magazine: According to the Institute, how receptive is the younger generation (age 14-25) when it comes to financial matters and precisely savings? SASI: Youngsters are receptive for that moment, but it takes a lot of effort and follow up to be done for the concept to be personally utilized. This is due to the influence of the environment and the community at large. OOdles magazine: From what age is it recommended to start saving? SASI: The Institute has no recommended age of when to start saving. We encourage parents to teach children to start saving as soon as they are able to count properly as one of our slogans clearly state that “Li gotjwa li sase manzi”. It is never too late or early to start saving.
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Interview OOdles magazine: How can parents convey effectively the message of savings to their children? Are there any interactive ways (eg: games) that could get the message across in a fun way? SASI: Parents can convey the message of saving effectively by encouraging children to contribute towards buying of a certain item (e.g a soccer ball or a doll) that they require by saving a portion of their pocket money. For instance, children can save money in a money box, bearing in mind that they are saving for an item that costs this much for a certain period of time agreed upon with a parent for that item. When the period lapse the child can then count the money and ask the parent for a difference so that they can buy that item.
‘ We encourage parents to teach children to start saving as soon as they are able to count properly
This will serve as an encouragement of saving towards children as they feel confident that they sort of bought themselves something and this gives them a sense of responsibility. We have not used any games to encourage saving hence cannot recommend any. OOdles magazine: What should we tell our children about the importance of saving versus spending?
’
SASI: Parents should take the first step of teaching their children the difference between a want and a need. A need is something that is necessary, that we cannot live without like food, clothing, transportation, shelter and so on. Wants for children are typically expensive video games and various forms of entertainment. While it is alright to spend money on our wants, it is important to learn self-discipline in the form of financial planning. If children grasp the concept of differentiating between needs and wants early in their lives, then they would be better prepared for making good spending decisions down the track. OOdles magazine: How should parents explain the concept of debt to their children in an understandable way? SASI: Parents should explain the concept of debt to their children by making examples that apply to them. For instance, if the child borrows money from one of the learners at school and cannot pay it back, ask him/her how does it feel every time he/she sees that learner.
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Interview Another lesson to be learnt in this scenario for both the child and the parent is that the parent should not pay the child’s debt. When the child pays the debt with the money they had to save, the/she will understand that parents will not clean up the mess and he/she has to learn to have self-control. Other possibility is that, after being nagged by the lender, the child could learn not to borrow because it does not feel good to owe anybody. OOdles magazine: How should children structure their pocket money, ideally, to include the saving element in their budget? SASI: Children should be taught to plan for the money even before they receive it from the parents. Parents should advise children to write down how they plan to use every cent they are given. A recommendation to save a certain percentage of that amount should always be there with a feedback given to the parent on how they resultantly used the money. This will teach children a sense of accountability and this will be a life time lesson. OOdles magazine: What would be the greatest challenges in spreading the “save not spend” message across the South African youth community? SASI: The biggest challenges we see are the following: • The foundation laid by the adult community of the hand- to- mouth living/surviving more consumption and none saving • A concept or mentality of buying on credit and having no problem when indebted. Indebtedness is a norm to South Africans •
The rate of unemployment amongst the youth of South Africa
• The continuous inflation rate that leads to the falling purchasing power; as a result it becomes difficult for everyone to save when there is enough for consumption only and nothing to save The South African Savings Institute (SASI) is an independent nonprofit organization dedicated to developing a robust culture of saving in South Africa, addressing issues like the poor savings rate, the disparate living standards, the lack of financial literacy and the poor growth of the economy. SASI is reliant for its operational funding on its sole anchor sponsor the Industrial Development Corporation. Contact SASI at +27 (0) 11 269 3789, email Elizabeth Lwanga-Nanziri with your queries at elizabeth@savingsinstitute.co.za or visit www.savingsinstitute.co.za for more information.
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Parental Advice
Guilty as Charged! by Mirinda Laurens
In an ever increasingly “cash free” society, where credit cards,
debit cards and internet banking have taken a more prominent place, as parents, it is an important part of our responsibility that we continue to teach our children the value of “real” money and how to manage their money from a young age. How do we go about teaching our children when there are several of methods that could be used? It’s good to start at the beginning by giving your child a monthly or weekly allowance. The amount should vary, depending on the age of the child, the level of responsibility given to the child and the amount you as a parent can afford. Once your child has learnt the value of earning money in return for chores, good school marks or good behaviour for example, they can then also be taught to save a portion of their allowance, with the remaining part being theirs to do with what they want. It’s also important to introduce a budgeting system over time. Give your child an allowance that allows them to save for and buy essentials like toiletries. It’s also important for you to sit with your child and identify which items you expect them to start saving for with that allowance. As your child gets older the allowance can be increased, which then also starts to teach them to make provision for things like school fees and their extra curriculum activities. This will teach your child to be responsible with money, while also teaching them to think about the things in life which have costs that they may not have considered - like their sports clothes and equipment that they might only have taken part in on a whim. There is this one big mistake that parents often make - parents love to give to their children. When birthdays or Christmas come along we buy our children expensive gifts. Our children then start to expect to be spoilt and these gifts are not cheap! A play station can cost R2 000 to R3 000. What we so often forget is that once our children start working, their entire monthly salary might be R5 000. Something very difficult for children to then comprehend is that they received gifts from Mom and Dad that cost almost the same value as their entire monthly salary. So what do they do? They revert to the good old faithful credit card, which encourages the “must have it now” syndrome.
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Parental Advice Start encouraging your child to think about saving from when they are small. Allow your child to save towards an item and when they have saved half, you can (as the parent) assist by giving the remainder. Your child will learn not to expect it immediately, as well as the value of saving and will appreciate their purchase. We as parents should think twice before we buy our kids the next best toy without having taught them how to appreciate or earn that gift. Also consider the amount that you pay for things that may not even be used. Stop and ask yourself: “Am I guilty as charged?”
‘Teach your
children to save a portion of their allowance
’
Mirinda Laurens CFP ® is a Certified Financial Planner at Consolidated Financial Planning. Consolidated is a national financial planning practice with offices in Western Cape, Johannesburg, Tshwane, Eastern Cape and KwaZuluNatal. Mirinda Laurens is based in Johannesburg. For more information please visit: www.consolidated.co.za.
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Courage to Succeed by Nikki Viljoen
David Viscott says “If you could get up the courage to begin, you have the courage to succeed.”
We’ve all heard the words that every great journey starts with a single step! I know that each time I hear those words they resonate deep down inside, but the words of David seems to take it to a completely different level. You see I remember, I remember each time I embarked on a particularly difficult journey, how it felt inside and how scared I was. Take for example when I started my business, now eight years old, how I struggled with myself and my decision. Making the decision to go on my own was one of the hardest things I have ever had to do, yet I knew that if I did not actually make the decision, I would be left ‘wondering’ for the rest of my life! Wondering what life could have, should have been like and that I was not prepared to do. Once the decision was made, it took about a year for me to set things up in my own mind and then when everything was set up and the first step had to be taken, that is when I seriously panicked! I mean really, what was I thinking? I was in my 40s, I had no alternative income – passive or otherwise. I was seriously putting myself into what could potentially be a dangerous situation. I hesitated and procrastinated, all the while knowing what I had to do but still petrified. Eventually I got sick and tired of feeling fearful – it happens to me, I get bored with the way that I feel, particularly if it is fear, or even being in a bad mood (it never stays too long because I get irritated with myself). So I took a deep breath and took the big step out into the void and found . . . solid ground. It’s when I found the core of me, my own value – both issues that I had doubted for most of my life. It was when I found my true strength and character. It was when I took ‘my’ power back from all the others that I had allowed to have power over me and to control me. It was when I found the ‘measure’ of the woman that I was to become. It is an incredible journey that we travel, this life that we live and if we allow it to be all that it can be, we will truly be who we are meant to be and we would be victorious. I had the courage to begin and I have never regretted it – do you? Nikki is an Internal Auditor and Business Administration Specialist. Contact Nikki on 083 702 8849, nikki@viljoenconsulting.co.za or www.viljoenconsulting.co.za.
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Vastfontein Community Transformation by Denisa Oosthuizen
Under the slogan “Raise a Leader, Release Potential, Reach a Dream�, Vastfontein Community Transformation goes beyond education with its journey towards transformed lives, an itinerary where hope, friendship, acknowledgement and leadership are present at each step of this developing journey.
Having been presented with the opportunity to discover more about Vastfontein’s contribution to a better education and the improvement of communities in need, Oodles magazine had a chat with Elandi-Marie van Jaarsveld, Marketing and Fundraising Officer at Vastfontein Community Transformation about its mission, vision and road ahead. We hope that this initiative will inspire others to understand, contribute and aspire towards a better education system for South Africa. Vastfontein Community Transformation started in June 1998 as a small concern managed by individuals, but has since grown into a Section 21 company, a Nonprofit Organization (NPO) managed by a Board of Directors. Vastfontein is also registered as a Public Benefit Organization (PBO). According to Elandi-Marie, Vastfontein Community Transformation has since expanded into a socio-economic development that raises, educates and equips future leaders from communities, releasing their potential towards success and a better life. Situated in Onderstepoort, Pyramid, north of Pretoria and serving the surrounding communities, among them Soshanguve and Doornpoort, Vastfontein Community Transformation has grown from a modest Christian school into a well-
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Education grown initiative that includes child care centres, the Batho Pele Christian School, a clinic, the School of Church Planting and diverse cross-cultural events focusing on transformation, education and AIDS awareness.
If this seems nothing short of a miracle, let’s have a look at the various development programmes that take place at Vastfontein, comprising of business and leadership development.
Since 2005, more than 4038 lives have been transformed, 171018 decent meals have been served to children in need, 5246 people have received medical care at the clinic, 530 children aged 3-15 have attended the Batho Pele Christian School, while the School of Planting, commenced in 2008, received 72 students.
The community transformation project allows for basic education as in the Christian school frequented by children aged 3 to 15 from nearby villages and townships. “We started with a small classroom and have added another one each year to grow our school and facilitate the children’ education up until the 7th grade. Our aim is to further add classes to allow our children to get a complete education at Vastfontein“, said ElandiMarie, the marketing officer at Vastfontein Community Transformation. Besides basic education, Vastfontein focuses on skills development, ranging from agricultural to technical and business skills. The School of Church Planting can be seen, in this view, as a fertile ground for developing future leaders, with a six months intensive training programme addressing these skills. The leadership development comprises of various leadership camps where students learn how to develop their potential, use the skills they have learned and understand that there is a better future out there for them.
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Education
One of the most recent projects developed is the foster care programme which gives a chance to orphaned children to live a normal life, receiving personalized parental guidance and attention, a place to stay and access to education and medical facilities. Vastfontein Community Transformation has build two care centers, suitable for 12 orphans to start a better life and future plans include the constructions of at least another two similar centers.
All photos are courtesy of Vastfontein Community Transformation
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Education Should you wish to contribute to Vastfontein’s development, sponsor a child or make an investment in a transformed generation, contact:
Elandi Marie van Jarsveld elandimarie@vastfontein.co.za, call +27(0)71 352 9884 or donate into the following account:
Vastfontein Community Transformation ABSA Savings Account Acc nr. 9060206990 To learn more about Vastfontein Community Transformation, go to www.vastfontein.co.za. WealthWise magazine and its youth supplement, OOdles magazine, are committed to feature and support similar initiatives on youth development and empowerment in South Africa. Send your comments, feedback and stories at editor@wealthwisemag.co.za.
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Dream to reach your goals by Nikki Viljoen
Like most people who own their own businesses, I am a very "goal orientated" and again like most people who own their own businesses, those goals can and have changed on a daily basis.
The below advice to put the goals into some sort of order of priority is something that, quite frankly needs to be done! The way that I find easier to do this type of thing is to have a 10 year, 5 year and then one year plan, and at this time I am referring specifically to the work arena. Looking forward into my life and into the future for me, makes what I do and how I achieve those goals very important. So I take the most difficult of all and ask the question - what would I like to be doing in 10 years time. Where would I like to be in terms of my business and what would I have liked to achieve. For me these are the 3 most important questions and they are listed separately, with all the bits and pieces going on in rows beneath them. Once that is complete, I tend to break it down and so here comes the 5 year plan. Looking at the 10 year plan, many of them are automatically achievable if certain of the other goals are met and brought to fruition, those do not get transferred to the 5 year list, but remain on the 10 year list. Again what is on the list is broken down into easier to achieve "bite size portions". Again, once that is complete, I break things down and out of this the one year plan is born. As with the 10 year plan, many of the points on the 5 year plan are automatically achievable if certain goals are met and brought to fruition, those do not get transferred to the one year list but remain on the 5 year list. I now have a list that is 'doable', even if it is somewhat daunting! Now for me, here comes the challenge. There may still be goals that are automatically achievable if other goals are met - these are split out from the others and listed to one side. The remainder of goals are then taken one at a time and what needs to be done to achieve each one is listed as a sub-heading under the goal to be achieved. These are then given a 'due date' by which they are to be completed - those due dates are diarized, and also put down into my year planner so that they can be seen at a glance. By checking my year planner on a weekly basis the task can be planned out into daily expectations and what I like to call "mini targets".
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Life and Business I now have a workable solution to something that at the beginning of the exercise, was a hugely daunting, frightening and quite frankly an over whelming task. On a daily basis, use your diary, or a journal to record what you have done and what you have achieved or have not achieved and why. Apart from documenting your life, you are also cleansing your mind and settling emotions! So what am I saying here . . . . Well basically it is this - If you want to be a success in life and/or in business, you have to have a plan! Issues need to be put into perspective. You need to achieve your goals, one little step at a time - remember the statement (I forget now who wrote it, but it is very true) that the greatest of journey's begin with a single step. Note it says step - not leap, or sprint or anything else that you may want to conjure up in your mind's eye. At the end of the year, take your lists and look at what you have achieved. Now is also not the time to beat yourself up over what hasn't been achieved! I have no doubt that you have done this sufficiently during the course of the year. Remember daily goals have changed to accommodate ever changing needs and there are goals that have been achieved that were not even recorded or considered. Because of the changes there are also many goals that are now obsolete, so they now no longer feature.
‘Don't gaze into the future and try and complete the 10 year plan in the one year space
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Adjust your goals for the coming year. Take time out - I mean quality time with yourself, turnaround and have a look at where you were 12 months ago, what you have achieved and the journey that you have walked. Pat yourself on the back and give yourself credit for what you have done! Too often we are too busy bashing our own selves on the head because of what we haven't done, instead of congratulating ourselves and patting ourselves on the back for what we have achieved . . . more often than not with more tasks that had not been on the list than what were. And remember . . . focus on the goal that is in front of you - don't gaze into the future and try and complete the 10 year plan in the one year space. Nikki is an Internal Auditor and Business Administration Specialist. Contact Nikki at 083 702 8849 or nikki@viljoenconsulting.co.za or visit www.viljoenconsulting.co.za.
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"Wealth is the ability to fully experience life" Henry David Thoreau, American Essayist, Poet and Philosopher, 1817-1862
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