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Instilling values about money early in children

By - | July 7th 2012

Your financial habits will often rub onto your children. If you are always not paying your obligations, chances are they will be poor at it too, writes SIMON ANYONA

There are parents who dread tagging their children along to the shopping mall for the monthly household shopping. This is because there is bound to be drama, iced with embarrassment as the child calls all attention in the supermarket to you with their wild tantrums demanding for this and that to be bought for them.

For many, it is not child’s play to control their child’s temptations when he enters a mall or a huge toy store. Also the temptation of loosening your purse strings just because your child has set his eyes on a jazzy remote-controlled car or a flashy gun also usually rages.

But this ‘your wish is my command’ technique is not a healthy practice. Hence it is in the best interest of both the child and parents to instill financial discipline and adopt the technique of ‘value buy’ from early days.

Mirrors you

But how is this done? According to Esther Njeri, a financial planner and investment mentor with Diamond Investments Limited, parents contribute a lot to the financial problems their children face in adulthood.

“Your answer to this simple quiz here will prove this. How much money do you have in savings? Do you often find yourself laden with debt? Are you always being penalised for not paying your bills on time? Do you often find that you have too much month at the end of the money? Are you always ambushed by financial obligations such as school fees, hospital expenses, monthly rent, car loan or mortgage repayment?” poses Esther.

She notes that, when faced with some or all the above financial challenges, many tend to blame the harsh economic times, the rampant rate of inflation, their employers for paying peanuts or the landlords for being so punctual in demanding their dues.


“However, what many don’t realise is that the financial problems they face could be the result of their upbringing. Parents contribute to this by failing to instill and nurture key financial values and disciplines at an early age,” says Esther.

She reveals that many middle aged Kenyans lack adequate financial planning skills thereby giving rise to a large cross section of Kenyans with a low savings culture, a huge appetite for debt and who remain perennially broke.

“But they are not to blame. They were just not given basic money management lessons by their parents,” she says with grin.

Nobody taught them the importance of savings or planning to acquire anything. When most middle aged Kenyans want items such as a car or house, they quickly walk into a bank or go to their chama (investment groups) and get loans without much consideration.

She adds that some people dig themselves so deep in debt that they turn into “serial borrowers” where they have to borrow from one friend to pay the other, and from one chama to pay the other. She says that developing a savings culture in your child is the starting point to teaching them essential lessons about money.

Edna Koskey, a mother of a eight-year-old son, says the importance of teaching your child how to save and plan for their money cannot be overemphasised. She was initiated into this early in life and she is not taking chances with Gabriel Kipkorir. She says those financial lessons played a big role in shaping her financial habits, as a result she learnt to manage the little money she had and to live within her means.

The result of this is that unlike most employees, Edna has never taken a salary advance from her office in her several years of service, thanks to the financial planning and management skills that were instilled in her at an early age.

“The lesson was simple. Whenever I wanted something, I would have to plan and save for it. There were no bailouts and my parents would only add on to what I had. This is the very lesson that I’m passing on to my son,” she says.

Gabriel has to save at least a third the value of any toy he wants, except for special occasions like his birthday and during festive seasons.

Esther says: “Savings are not just about acquisition of property. They come in handy on a rainy day when one has to pay for sudden or unexpected expenses,” she notes. When faced with these, many opt to call family members and friends to chip in.

She says that saving for a rainy day is a critical lesson that parents ought to teach their children. She explains how one day, her daughter Linda overheard her telling her husband that she didn’t have money. Linda quietly rushed to her bedroom and brought her piggy bank. She said she had been saving up and she wanted me to have it.

At that moment, Esther realised her daughter had learnt this critical lesson that money does not always have to be saved to buy something, it could also be for an emergency or a time when one does not have money.

Modern day excesses

In his book Self Discipline; The Key to Successful Saving, Dave Stack explains that the excesses of modern day living are becoming a lifestyle where people just love to spend on unnecessary things. People fancy eating at posh restaurants; excessive shopping and a healthy appetite for luxuries, whichs have led many to spend beyond their capabilities, thanks to the readily available credit facilities.

However, with a good financial education and discipline, one would hardly fall into these traps especially when such skills are instilled and nurtured from childhood. He adds that most parents teach their children that they can have whatever it is they desire through the available facilities.

“When they are children, you were the facility, when they become adults and are working, they have financial institutions. Most parents teach their children the easy ways out,” he says.

Dave Stack says that for a child to learn about money early, they have to earn it early. The first step is, therefore, to give them a monthly allowance. If the child wants something, you ought to encourage them to think of that item in terms of their allowance.

For instance, let them ask themselves how long it will take to get something if they saved, say Sh500 per month. What can they do to get it faster? What can they forego buying to ensure that thry get what they want?

He says that teaching children to always think in terms of their allowance teaches them to always live within their means and to prioritise their needs. These are critical lessons in life.

Once they have a regular income, they need a saving account. The account helps to nurture the thoughts that savings have to be put somewhere away from easy reach. Putting it away first gives them a chance to plan on how they will spend it. He says savings made should be rewarded to motivate them for matching every penny they save.


Most financial institutions (commercial banks, microfinance institutions and Saccos) have established saving facilities for minors for which they accept birth certificates accompanied by the original identification documents of their parents. For children aged below six months, they accept the birth notification sheet and, in most instances, the parent operates the account until the minor turns 18 years.



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