Children need saving and spending lessons

I was in the banking hall the other day and three excited children aged between three and six sauntered in with their coloured piggy banks. Their mother was equally excited as she helped them count their coins and fill the banking slips. When they were done, they walked away with their empty piggy banks to start another cycle of saving.

From a lay-person's point of view, this is a good way of training children how to become super savers and live the savings culture from a young age. But if you stand back from your view and objectively think about it, this approach nurtures people who are going to 'worship' money at the expense of their own well-being.

At that young age, they are learning that once you earn money, you hand it over to a banker who will keep and grow it for you. Why? Their mother probably did not allow a some little slice of their savings to buy even ice-cream. The children are being trained to save and be mean to themselves and to others around them. In fact, they will grow up knowing that the money in their accounts is not to be touched so when you are in a fix and you want some financial assistance from them, these little savers will plainly tell you that they do not have any money yet their account statements read millions.

As you show your children how to save, do not forget to train them how to spend the money. By the time they start saving, they have been thoroughly trained on how to earn the money. While I wouldn't know how a three-year-old will know how to earn and save money, for the older children it is easier to train. It is noteworthy to remember that nearly all the savings these children make is your money and you are not just going to throw it at them; it doesn't work that way.

So just as you work throughout the month to earn your salary, the children should also learn that they will wait until you get money for them to earn for whatever work or good gesture demonstrated in order to save. This teaches them patience and prepares them for real life where instant coffee gratification does not apply.

Every chore given should never be 'paid' for. You only reward for work well done. If your child goes beyond duty given, reward them accordingly and they must be told why they have been so 'paid'. Apart from training them how to make money when they grow up, they learn other important values when it comes to earning and saving.

Before you head to the bank with their little piggy banks, sit with them and talk about how much they have saved and how to spend it. The principle of saving a third or so of your salary also applies to the little ones. If one has saved Sh150 over a period of time, work out a budget on expenditure and savings. Let them save Sh50 and come up with how to spend the balance.

Encourage the children to buy themselves a story book, pencils or pens but also allow them enjoy something else of their choice such as sweets or ice-cream. Knowing they bought something out of their 'sweat' encourages them to take care of the item(s).

Then tell them about the importance of savings such as how the money accumulates after some time and they are able to buy something bigger. For goodness sake, do not just let their money lie idle in the bank, once it reaches say Sh2,000 invest it in something that gets them interest. Keep them updated on how their money is growing and how long it will take them to achieve their goal. Areas that you could consider that earn interest include saving with a chama, shares, farming or any other business that brings returns. Be sure to calculate their interest honestly. Do not misappropriate their money.

Indeed equipping your children with sound financial skills is an investment for yourself in the long run. You do not want to leave your inheritance to children who have no idea how to use money to make more money!