How to raise money-savvy children
Admin .
@New Vision

Media reports about Primary Seven pupils taking an unauthorised trip to Entebbe to engage in questionable activities brought to the fore the dilemma of parenting in a digital era.

What came to mind was the question of how we can balance close supervision of our children and facilitating them with gadgets that ease their access to communication and technology.

Another issue to consider is how much age-appropriate information our children should be exposed to, the suitability of parenting styles, and how to nurture a confident child that cannot easily succumb to peer pressure.

It is very important to bring up money-savvy children. Ideally, every child who has obtained a level of comprehension should be exposed to money concepts. These concepts, if taught at a tender age, come a long way in moulding fiscally responsible adults.

However, we need to pay keen attention to the fact that the money lessons need to be put in the context of the prevailing digital age, where children have access to tools that provide even more information at the click of a button.

This means that if not well supervised, our children can misuse it for selfish ends.

Parents have to ensure that the appropriate financial education we give our children is in tandem with parenting rules that nurture responsible children who do not misuse this new found information. We should be very conscious about where we keep our financial records, cash and items such as debit cards, credit cards and cheque books.

The question, therefore, is: How do we ensure that we raise responsible children that use the available digital tools to mould positive financial habits?

The first role model regarding money management is the parent. That is why we have to ensure that whatever we teach our children about money is practiced at home, because most of the children learn by observation. To be a good role model, parents have to be financially literate first.

As a start, an important money lesson for our children is earning.

Most economically active parents provide an allowance to their children. Depending on your means, determining the appropriate amount for an allowance is your judgement call.

You need to teach your children that money is earned. If you expose your children to unusually large amounts of money as allowances, you will inadvertently breed entitled children who think it is their right to get money from you to satisfy their every need and want. Consequently, you will be their ‘ATM’.

In our society, we have adults who still go to their parents for financial support because of this kind of upbringing. Interestingly, the same parents expect their children to be financially independent when they eventually start earning a living. Therefore, before you pay allowances, encourage your children to do chores at home to get sensitized of the fact that they need to work hard to earn a living.

Another equally good money lesson is through observation.

Parents should take a step back and examine their money attitude and habits and how this is reflected in their households.

While you can do a good job of teaching children the different money concepts, the best lesson is through observing parents who are usually their first role models.

For instance, is money a subject of discussion at the dinner table? Do you use budgets and shopping lists to manage expenses? Do you teach delayed gratification and saving when your children demand all their desires? Do you manage expectations by addressing children about the state of affairs of your finances?

Are you mindful of the fact that there is a need to be cautious about expenses, save for future expenses and be careful when managing what has already been purchased by avoiding waste?

This will provide practical money lessons that they can bank on as adults to manage their household budget prudently.

On the other hand, if you expose them to lavish spending and get them all their heart’s desires, even when you have to borrow, you are inadvertently grooming children with poor money habits.

Equally important is living within your means. This should be illustrated by taking your children to schools that you can afford. If you punch above your weight, it will be difficult to manage their expectations when they present a long list of requirements that include taking trips abroad. I know a number of parents who take loans to fund children’s school trips abroad. To manage the school fees headache, it is advisable to set up an education fund, which should be up and running even before you start having a family.

Away from a traditional savings account, you can invest in government treasury bonds. These are useful money lessons for children as opposed to subjecting them to the inconvenience of being sent away from school to fetch the fees dues.

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