Be deliberate about raising money-smart children

The earliest memory some people have of money is of spending it. Mummy or that neighbour or visitor gave you a coin and the next thing you did was to run to a shop and buy mandazi or pancakes.  Subconsciously, you have carried this same template into your adult life.

Philosophers, as far back as Aristotle, have hypothesised that the human mind is born with a “blank slate” (tabula rasa); that whatever you write on it sticks like glue on a paper. This is why it is important for parents to write good financial principles on this slate. 

Three assumptions should underpin your interest in teaching your children about money:

Schools hardly teach money management

The closest children will ever come to knowing about money and its management is by watching their parents. Yet we are stewards, not owners, of all financial resources that God has given us, as Psalm 24:1 puts it: “The earth is the Lord’s and the fullness thereof, the world and those who dwell therein.” 

Teaching proper management of the few financial available resources will go a long way in raising money-savvy children.  According to some sources, the best time to teach children about money is when they are three to four years because at this age, they have begun to count.  But how do you approach the subject of money with your children? 

Teach them how to save

Start teaching the principle of saving

Proverbs 21:20 says it well: “There is precious treasure and oil in the house of the wise (who prepare for the future) but a shortsighted and foolish man swallows it up and wastes it.”  You can buy a metallic, plastic or wooden piggy bank, where a child learns to drop his money and keeping it away.  Offer incentives for savings, such as paying them an interest earned on the money they have saved. Then you can introduce them to banking later.

Teach them to save with a definite and desirable goal. My children save for their birthday gifts. The gifts are so important to them that they will sacrifice their appetites and delay gratification to save for a gift.  The goal must also be achievable to inspire them to reach it.

Teach them to share

Saving money is good but if not counterbalanced with the virtue of sharing, you will produce stingy fellows.  It is good to teach children to give away something or some money, sometimes. You can do this by coming up with a community project to give to the less fortunate or whatever cause you feel will relieve pain and improve the livelihood of others.

Giving is one way to help meet the needs of others, so you are teaching them caring for others beyond themselves .

Earning extra money by working

Proverbs 10:4 says; “Lazy hands make for poverty but diligent hands bring wealth.” Give them a chore or task and peg some money to it. It has been suggested that the time children spend watching TV will directly influence how many items they will ask for at the grocery shop. To take them away from TV, give them work to do and pay for it. Do not pay them all the time, however, so they do not have to do ordinary chores for money.

Allow them to come up with small money-making ventures such as washing cars, helping out a neighbour with cleaning their compound, something age-appropriate to earn money from.    

Take them for grocery shopping

 Let children see you bargain for lower prices (if you are not shy to). Involve them in making a choice between two similar products. Teach them the difference between need and want. Let them know that money can be limited and finite and, therefore, choices must be made on how to spend it. There are tradeoffs when you spend today. You will have less to spend tomorrow.

There are opportunity costs—buying one product will prevent you from buying another. This will require that they learn to budget their money to avoid impulse buying. Proverbs 21:5 puts it aptly; “Careful planning puts you ahead in the long run; hurry and scurry puts you further behind.” Extravagance is a not choice you want for them.

Share family financial goals

Engage children in planning for their school fees going forward, purchase of land, building a house, planning for a family vacation abroad, any major investment. Pick their mind on these matters. They may be young and you might not want to load all the facts on them, but age- appropriate involvement in the family plans teaches them to understand the value of money. 

Give them allowance

Research has suggested that children who receive  an allowance are more sophisticated about money and this prevents them from making huge financial mistakes. If your child is five or six, give them an allowance, no matter how small it is.

Contentment

Children will always want more. As a parent, find a way to curb the clamor for things they have watched on adverts on television or have seen their friends own.