Hey there, and welcome to another edition of Mini Millionaires.

This week, we’re getting prepared for these unexpected financial emergencies with this week’s topic: How to teach kids about financial emergencies.

Unpleasant things happen. A burst geyser right before payday. A car battery that’s gone flat and needs replacing so you can get to work. A sore tooth that won't go away (three days after your medical savings have run out).

These things can get us down. But if we are prepared for them, we can turn a pretty painful emergency expense into a minor blip in the road. So if we can already instil financial preparedness into our kids, they’ll be on track to face anything life can throw at them.

Let’s get into this week’s edition.

Emergencies happen all the time. But this doesn't have to lead to panic.

Something breaks at home, an unexpected cost for school, or even a pet that needs the vet. 

For adults, those surprises can sting because many of us were never taught how to plan for the unexpected. Around 80% of middle-income South Africans have little to no emergency savings, meaning when those unexpected financial emergencies hit, they’re either going to struggle to cover it, or rely on debt to bail them out.

So while kids aren’t footing those bills yet, we can still teach them the mindset behind preparedness: calm over chaos, planning over panic, and the habit of thinking ahead.

Expect the unexpected.

When something goes wrong, kids look to adults for cues. 

And if we treat an unexpected event or financial emergency as a normal part of life, our mini millionaires will see it that way too.

When children are able to ask questions, talk openly about uncertainty, or even listen to their parents talking about their own feelings during times of extraordinary stress, it actually helps them feel safer, and even find ways to cope in these kinds of situations.

The temptation as parents is to shield them from surprises, but the opportunity is actually to show them that every problem has steps, and steps have solutions.

Takeaway: Bring calm to the situation: “That didn’t go as planned, but let’s think it through.”

Practice “what if” thinking.

Kids love using their imagination. So use their imagination to spark problem-solving and flexible thinking.

Every now and then, pose a playful question: “What would we do if the lights went out?” or “If your bike broke, how could we fix it?”

Helping kids plan, adapt, and follow through strengthens their executive function skills. Surprise surprise. It’s those same skills that’ll help your mini millionaire budget, plan, and prioritise.

What if thinking helps them not worry, but get ready?

Takeaway: Little practice plans today build big problem-solvers tomorrow.

Turn small surprises into mini lessons.

The next time something doesn’t go to plan, like a cracked toy, a lost lunchbox, or a fine for a late library book, make it a team problem. 

Ask your mini millionaire, “What do you think we could do?” Maybe they brainstorm, repurpose, or pitch in part of their pocket money.

It’s a tradeoff between protecting them from something small right now, and letting them learn in a safe, low-risk environment now, so that when life’s big financial emergencies hit when they’re older, they already have the groundwork put in place.

Takeaway: Don’t protect them from every bump, but guide them through it.

This week we’re sharing not one, but two awesome resources.

The first is a pretty nifty tool from our friends at Fynbos Money. Their Emergency Savings product helps families put away money for life’s unexpected expenses by setting up automatic transfers. These emergency savings are directly invested with Allan Gray, so they balance low risk, with a better return than a traditional bank’s savings returns.

They have a handy calculator so families can see how much they need to put away for an emergency.

Then, for kids, our downloadable Savings Goal Tracker earmarks how much savings goes towards an emergency, how much goes towards something specific, and how much is put away for the longer term.

It’s crucial to ensure that emergency savings are a standard entry, so it teaches kids that savings have two purposes: covering life’s unexpected emergencies and buying fun stuff.

Two weeks ago, we joined The Open Letter team for their in-person event at Innovation City in Cape Town to host a FinMaster Games room.

Over 150 founders, investors and startup operators came together to gain some awesome insights on the state of South African e-commerce, with special guest Frederik Zietsman, CEO of the Takealot Group.

We loved sharing FinMaster with some intrepid board game explorers, sharing laughs, and learning some surprising money skills.

If you want to get your hands on a copy of FinMaster, some of our awesome partners can get stock right to your doorstep.

In our Mini Millionaires poll last week, we asked what’s a big purchase your mini millionaire has a purchase plan for, and it looks like sports, scooters, and smartphones are the order of the day…

⬜️⬜️⬜️⬜️⬜️ 🎮 The latest console.

⬜️⬜️⬜️⬜️⬜️ 👟 A cool pair of sneakers.

🟩🟩🟩🟩🟩  🏏 Sports equipment.

🟩🟩🟩🟩🟩 🛴 A new bike or scooter.

🟩🟩🟩🟩🟩 📱 Their first phone or tablet.

What you said: 

“Ballet shoes and swimming goggles. Followed closely by a bike/scooter, but that may or may not have been added to the list for Grandsanta to leave under the tree...”

Jason

Oh, you’ve got to love Grandsanta and Gramma Clause coming in clutch around Christmas…

What’s the mindset, habit, or tip you want to try this week?

What worked, what didn’t? Or is there something that’s got you and your mini millionaire excited? 

We’d love to get your thoughts, so hit reply to this email and let us know what's on your mind.

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