How to teach kids about inflation: Turn the money monster into a win with our Bit by Bit resource and learn the price per piece trick
Remember when you’d walk home from school (barefoot and in the snow) and that R10 in your pocket bought a feast at the corner shop?
Today, it barely covers a small, inexpensive chocolate.
Inflation feels like a money monster eating our kids' savings, but it’s actually the perfect opening to discuss wealth preservation.
For a mini millionaire, understanding that a Rand’s value changes over time is one of the first steps toward financial literacy.
This week, we’re turning "everything is getting so expensive" into a lesson on outsmarting the rising cost of living.
The Time Traveler Perspective.
Teach kids that the value of money isn't frozen.
A Rand today is stronger than a Rand next year, meaning it has greater purchasing power historically, simply because you could get more bang for your bok.
So instead of seeing price hikes as unfair, help your mini millionaire view inflation as a benchmark to beat.
If the price of their favourite toy goes up by 6% annually, their savings need to grow by 7% just to keep up.
Takeaway: Don’t just save for today’s price; invest to outpace tomorrow’s cost.
The Shrinkflation Detective.
Turn the weekly grocery shop into a fun game.
Ask your child to spot shrinkflation on the shelf.
Shrinkflation is when the cereal box gets thinner or the chip packet airier while the price stays the same. So while the shelf price hasn't increased, you’re getting less for that price than you previously did.
By comparing the price per kilo on the shelf labels, your mini millionaire learns to see through marketing tricks and understand how inflation hides in plain sight.
Takeaway: Tracking the price of the usuals turns them from passive spenders into active, inflation-aware consumers.
The Inflation Gap Match.
If your mini millionaire’s savings account earns 4% interest but inflation is 6%, they are technically losing buying power.
Offer to match the 2% gap as a parental dividend.
This visualises the concept of real returns and shows them why simply hiding cash under a mattress (or in the couch 😉) is a losing strategy over the long term.
Takeaway: To stay wealthy, your money must work harder than the rate of inflation.
This week’s free downloadable resource is the Bit by Bit resource.
Let your mini millionaire put their shrinkflation detective skills to the test.
When you’re out shopping with them, grab two similar items from the shelf, like juice or cookies.
Use the Bit by Bit formula in this week’s resource: divide what you pay by what you get, whether it's grams, milliliters, or single items, to get the price per piece (or unit).
For example, is a 120g packet of chips for R24 a better deal than 150g for R27?
By finding the price per piece, your mini millionaire/shrinkflation detective can make sure they get maximum value for every Rand, and outsmart sneaky price tags and marketing tricks every time.
