Many of us grew up in homes where money was never discussed, apart from when it lacked. Our parents and guardians were not very intentional about helping us to learn about money. At school, this was also very limited to the business studies curriculum, which again wasn’t mandatory. This lack of financial awareness and coaching at a young age is a real challenge that people must deal with in their adult life.
As modern parents and guardians, there is a lot, we can do to teach our children financial skills in their infancy, adolescence and youth that will become a major asset in their adulthood. But how, you may ask? Here are a few ideas you can try out with your little ones, recognizing that this is a lifelong learning process, and the impact will only be visible over time.
- Encourage the Adoption of Saving and Investment Habits
Children are very good and picking up new habits, especially if they see people close to them doing the same. Parents or guardians who practice and who talk to their children about savings and investments are very likely to influence them to do the same. The age-old piggy banks or coin boxes are great ways to teach children how to save money. Saving accounts for minors, run by the parents, in banks or saving and credit cooperative societies like Kanisa SACCO can also be good alternatives. Some families even have table banking schemes (merry-go-round or chamas) to help them with saving. It’s important to always remind them that savings should always be a way of achieving certain financial goals, that they need to come up with in advance. To facilitate this, parents or guardians can initiate regular allowances or pocket money programmes for the children to help them appreciate regular income. This can also be linked to a reward system for specific learning tasks they’re assigned and complete well. There’s no specific amount recommended, but it’s important to also not give them too much. With this money, you can then work with them to plan how they’ll spend it with the main goal being for them to save some for a rainy day, invest some to grow their money and spend the rest on needs and wants. If able, you can also facilitate some investments in their name and periodically discuss the performance of those investments and related decisions with them.
2. Involve them in Financial Planning
The best way to learn something is by doing it. Involving children in the planning of their own and family’s finances can be beneficial in helping them understand many things about money such as budgeting, the difference between needs and wants, prioritizing expenditure and avoiding wastage. Before doing their back-to-school shopping, or spending the money they saved in their piggy bank, sit them down and discuss their expenses. Draw up a budget with them separating the needs and wants and agree on what the money will finally be spent on. At the end of each month when you go shopping for your family’s groceries, go along with them so that they can experience the process and appreciate the on-spot choices you must make to ensure you spend within budget but still provide for the family. It also helps to teach them negotiation skills so that they know how to bargain for great deals whenever they have to incur expenditures.
3. Help the Understand Taxation and Charity
Paying taxes is a reality we must live with. The earlier we make our children understand this obligation to the state, the better prepared they will be in ensuring they’re compliant to avoid running into problems. It’s also important that they practice how to share what they have with others and give to those most in need. Valuing charity breeds contentment with what one has thus helping to stem greed. Whenever you give them allowances, why not build in elements of tax, tithe, and donations? This way they will grow up to develop generosity and know that not everything they earn belongs to them.
4. Expose them to the Workplace
Ever thought about tagging along with your child to work over the weekend or during their school holidays? If you haven’t, give it a try. Take them around, help them understand what you and your colleagues do and allow them to ask questions and receive answers to them. You can also facilitate study visits to different places of work or allocate them tasks related to your work that they can help you out with. Another option is to enrol them into school-based or organization-run holiday volunteering programmes like the Voluntary Service Scheme run by Starehe Boy’s Centre. Through such experiences, they acquire important job skills, work ethics and values that help them to determine their possible career or business paths. Exposing children to the workplace at an early age helps them to understand how money is made and thereby appreciate the value of work.
5. Normalize Discussing Money at Home
One of the best places for children to learn is at home, where they are free, can make mistakes and trust that everyone around them is genuinely concerned about their progress and well-being. Taking advantage of this, parents and guardians can develop a routine of family discussions about money with the children taking advantage of things in the home to help support learning. We should normalize discussions about money in the home so that children don’t see it as taboo to talk about money, whether it’s the abundance or lack of it. This way they will appreciate the duality of money and know how to handle both situations when they occur.
6. Facilitate Access to Financial Literacy Programmes
If able you can also enrol them into age-appropriate financial literacy programmes or attend financial talks and events with them. At school, you can encourage them to take up financial or business skills lessons offered either as part of the school curriculum or separately. There are also a lot of educative television cartoons and programmes you can recommend to them through which they can learn about money
As parents and guardians, we have a lot of influence over our children putting us in a unique place to guide them well. Our experiences and approaches to how we do this may differ – what works for one may not work for another. The goal however is the same – to bring up financially aware young people who can make good, value-based, independent financial and investment decisions that will propel them and their generations out of poverty. Do you have other tips to share? Please leave them in the comments below.
Nelson Opany is the Vice Chairperson at Kanisa Regulated NWDT-SACCO Society Limited “Kanisa SACCO” (firstname.lastname@example.org)