Lifestyle

Inculcating a saving culture in children

Wednesday, April 5th, 2023 09:03 | By
Inculcating a saving culture in children.
Inculcating a saving culture in children.

If there is one thing that the last few years post Covid-19 have taught us is the importance of having a saving culture. During the pandemic, many people lost their jobs, and other means of fending for themselves. Many businesses were closed. Those that were lucky to have saved for the rainy days were able to pull through without much struggle.

So, how do we inculcate a saving culture in today’s generation? How do we teach them that saving is a life skill? 

“The answer is simple. Start early when your children are young,” says Sylvia Muthoni Gichohi, Chief Training Officer at the Institute of Service Excellence (ISEL).

Rowey 2022 survey indicated that 37 per cent of parents don’t like talking about money, with many expressing embarrassments on the same.

The earliest memory some people have of money is of spending it. Your parent or visitor gave you a coin and the next thing you did was to run to a shop and buy sweets.  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.

Working with a blank slate

There is more to teaching children about money than just giving them pocket money.

Having worked with an insurance company, Paul Mulemi, a father of two children aged 12 and five years old realised that ‘the longer your money can work for you, the more powerful compound earnings (return on investments) becomes’. “Having learnt that, I know that not only do your early investments (savings for my children) generate more earnings with time, but the reinvested interest will also start with time as they grow. It is important to save early for the children because it guarantees them a better future,” says Mulemi.

“They have a piggy bank. This encourages and motivates them to know the benefits of saving. We have also opened an insurance policy for them. Lastly, we have the children bank accounts. This helps them know the importance of saving and will guide their saving habits when they mature. The savings will help them in future in aspects such as furthering their education, setting up businesses if need be or any other future  endeavour,” Mulemi explains 

Sylvia shares how from a young age, we need to teach our children about the importance of delayed gratification. As a parent, it is important to explain to your children concepts such as savings, budget and goals — then keep the money conversation going.

“Also, you can give them an allowance when they accomplish a task. Young children can have a piggy bank, but older ones might want to keep their money in a bank. Children should be taught about the importance of living within their means and discuss with them wants versus needs from an early age,” she explains.

You can start with setting up a savings goal, that is how much to save within a year. Once they save, there is need to help them track their spending. 

Instilling self-discipline

Sylvia offers: “You can offer them saving incentives, for example, for every Sh5,000 saved, the parent can give Sh1,000 to encourage more savings. Let the children have a chance to learn from their parent’s bad saving habits since it will help them avoid mistakes in future. As parents, we need to set good examples to our children by practicing what we preach.”

The expert says financial education is a basic life skill that teaches children to become financially responsible from an early age.“Teaching children about saving helps them to develop a healthy relationship with money and they are able to learn money management skills from a young age and thus develop healthy habits. There are great resources that can help parents teach and also learn about savings such as The Everything Kids Money Book; Earn it, Save it and Watch it Grow by Brete Mcwhorter, The Dollar Sense’by Stan and Jan and The Four Money Bears by Mac Gardener, among others,” Sylvia says.

She says there is need to teach children not to save what is left after spending, but spend what is left after saving.

Mercy Omollo, a counseling psychologist says teaching children to save makes them become self-disciplined. “As a parent, once you develop that culture, you find it easier to take control of their other aspects of life such as exercising regularly,” says Mercy.

“A child at a young age acquires knowledge as they interact with their environment, trying to make meaning from observing dynamic interactions between people, objects and their brains. Children have a desire to understand their environment and to be in active control of their own experiences. Therefore, setting some money aside helps them in personal and financial development, especially with budgeting, saving and building healthy money habits,” she adds.

By doing this, a child grows up with an innate understanding of the value of money through real life situations and applying their learning in using money that has been saved.

“It is crucial for parents to instill in them the ideals of hard work, earning one’s living and saving part of their income for the future. It is also important to instill in a child’s psyche the notion that money doesn’t grow on trees, rather, it must be earned. Teaching the basics of money management can assist them in developing good financial habits that will benefit them for the rest of their lives,” explains the expert.

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