South Africans aren’t known to be great savers and investors. It’s up to us to teach our children to do better in a spend, spend, spend culture. But most parents don’t know how.

For this reason, Franc, an award-winning app that helps South Africans save, invest and learn about investments, has developed child accounts that parents can link to their own account. It takes a few clicks to open an account and then a few seconds more to open a linked child profile (all you need is a birth certificate). To ensure that no one is tempted to access this money, it’s also possible to lock the account for a specific time.

Says Dr Thomas Brennan, founder and CEO of Franc: “Christmas is a good time to give a meaningful gift. Instead of yet another silly toy, give the gift of compound interest by starting to save and invest early for your kids. When their next birthday comes around, and you get queries about what to give your child, you can let grannies, uncles and friends pay a small gift into the account. They simply use the child’s reference when depositing.”

Dr Thomas Brennan: Founder & CEO of Franc

Dr Thomas Brennan: Founder & CEO of Franc

“The account can be funded with a stop order, once-off deposits via EFT or instant EFT or even directly from the parent’s own Franc account. Let your child see the benefits of long-term savings by opening an investment account.”

6 key ways to teach your kids to become money savvy

  1. Expose them to the cost of everyday items. Involve them in the shopping list and shopping to a budget.
  2. Encourage the use of their pocket money to buy special items such as a particular toy.
  3. Introduce the concept of interest on money that is saved. Show them the benefits of consistent long-term savings by opening an investment account with Franc where you can see interest earned.
  4. Involve your children in planning family outings and holidays on a budget.
  5. Entrepreneurial discussions at the dinner table can involve men and women who are successful and what they did to achieve their success. Brainstorm creative business opportunities and how failures can help on the way to success.
  6. Role model the behaviour you would like to them to emulate such as living beneath your means, shopping for specials, saying no to credit etc.

Consumers are often intimidated because investment products are so complex. Franc has minimised the complexity by narrowing the investment choices to just two funds, the Allan Gray Money Market (cash) and the Satrix 40 ETF (shares).  The Allan Gray Money Market Fund available on the app provided a return of around 5.2% over the past 12 months. The Satrix 40 ETF has returned 10% a year on average over the past 3 years and 9.2% on average per year over the past 10 years.

There are no minimum investment amounts and you can withdraw your money anytime without penalties. The fees are low and transparent.  It’s easy to check how the investment is doing on the app.

Should you get a bonus this year, Franc can also be used to save for different goals such as your child’s education, family holidays, or for your child’s first car. Through Franc-linked accounts you can add a nanny, domestic worker, or gardener for instance and start a savings account for them too.

Franc also offers simple educational content so you can improve your financial knowledge. For those who prefer not to use an app, it will soon be possible to invest directly from a Franc web portal.

Franc was created to make investing extremely simple and affordable and to ensure that, in just a few minutes via the app, anyone can invest for themselves or their dependents in leading cash and equity funds with no minimum investments and no paperwork.

Submitted by Turquoise PR & Marketing Communications