There are facts in life that nothing can change. As a mother, you give guidance on financial matters to your children. It is a fact that whatever you do – how you spend your money, what you say about it and your general views will shape your child’s way of handling money.
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You are the first source of knowledge about finances that children rely on and their attitude towards money will be influenced by you.
This gives a woman the great responsibility of imparting the right knowledge in financial management for future generations.
Many women seem to have inherited the unfortunate statement that ‘money is not plucked from trees’ and use it so often that their children are uncertain about spending money. Some end up just keeping the money safely — not investing it — for fear spending it.
However, as a person who younger minds look up to for direction, you can use this great opportunity to guide the little ones about money. Let us simplify how you can do this:
Preach it: As soon as children become aware of money, you must tell them the importance of this commodity. It is money that pays the bills (pay TV, rent, that holiday, school fees, food, buys clothes, etc) and it is money that will guarantee one a financially secure future.
Teach it: Tell them how money is earned. If you are employed take them to your work place and let them see how hard you work before you earn a salary.
Practice it: If self-employed, they should spend a day at your business premises just to appreciate that money does not fall from the sky but is earned after great sweat. Once at it, teach them about the pillars that make sense out of earning and spending money. We can call those pillars earning money, managing it, saving, spending and enlarging or growing it.
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Save it: After showing them how the money is earned, show them how to save and grow the money. Do this practically. Take their allowance as their earning. The allowance includes pocket money, earnings to motivate them after doing a chore exceptionally well, gifts and any other income they get at their age. Show them how to spend some of this money and saving a percentage.
Grow it: Guide them on growing this money they have set aside. It should never be left lying idle; but should earn some interest. Say your child has saved some Sh500. Show the way, by borrowing it from the child at an interest rate of 10 per cent for say a month. At the end of the agreed time, pay back Sh550 to the child, that is the principal amount plus interest of Sh50. Continue growing this money for the child and when such a child starts working, she will be ahead of the pack as she has practical knowledge about earning, spending, saving and growing her money.
Zip it: Do not talk negatively about money in front of children. Statements like ‘money is the source of all evil’ should not come from your mouth. How can they link evil with what the pizza money affords them? The best approach is to explain the dangers of ‘worshipping’ money instead of letting it work for you and others. There are ethics about money you can teach them and, of course, financial freedom.
Deserve it: It is good to point out at this young age that it is not right to put money above everything else; that it is not right to acquire lots of money whether in the right way or fraudulently. Money earned honestly is what guarantees one peace of mind to enjoy its proceeds and confidence to give out to heirs. Stolen money and property gives one sleepless nights. There is nothing as horrible as people referring to one’s possessions as ‘corruption and thievery proceeds’.
Enjoy it: Show your children the brighter side of savings. For example, if they are saving with the simple objective of buying an ice-cream, show them that they can grow their savings and instead buy an ice-cream machine which will ensure they have their favourite ice-cream any time they want it and make extra to sell to their friends, making more money that can be used on some other project for their betterment.
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