Financial literacy is an important but often overlooked part of our children’s education. While the new competency-based curriculum has tried to cover some of the gaps in the old system by introducing more material on the subject, parents still bear the biggest responsibility in helping their children develop responsible, lifelong financial habits.

Luckily, since they are still in their formative years and there is time to teach them to handle money responsibly. How do you go about it? Here are a few tips:

1. Teach them to save and budget

As parents, we don’t want to deny our children anything, but since we are preparing them for the real world, they need to learn the concept of delayed gratification. Teach your children how to budget and save for the things they want instead of buying them outright. This helps them understand that things cost money and if they want something badly enough, they will have to earn the cash to pay for it.

Similarly, budgeting allows them to learn that resources are limited, and they must prioritize their needs according to the resources available.

2. Give them an allowance on merit

Children need to learn that money is earned, not given. Instead of buying things for them, give them the chance to earn it by completing certain actions, for example, light chores around the house, cleaning up after themselves, etc. for a pre-agreed amount. 

Obviously, this does not apply to their basic needs; you will still need to pay for their food shelter, clothing and education without expecting them to earn it.

3. Start a savings/investment plan for them with their involvement

Children learn by doing. An act as simple as setting up a savings jar in the house will go a long way in showing them the growth that can be achieved through saving. Encourage them to save a portion of the money they earn before spending any of it.

Seeing money accumulate will have a bigger psychological impact than just words.

If you open a savings or investment account for them, let them take charge of putting funds into it. Take the time to go through their monthly statements with them so that they can see for themselves the growth achieved. 

A great incentive for them to save or invest is agreeing to match whatever amount they put aside for this purpose. If, for example your child brings you Kshs 200 to deposit into his/her savings or investment account, you could add an additional Kshs 200 so that he/she ends up saving or investing double the amount. 

4. Practice good financial behaviours yourself

Children pick up a lot of behaviour from mirroring what you do. If they constantly observe you spending money irresponsibly, it will be hard for them to be financially responsible, regardless of what you teach them. Impulse buying, erratic borrowing, fighting about money with your spouse and failing to pay bills on time are some of the things you should avoid.

Audit your own financial behaviours and see which negative lessons you may be passing onto your children unconsciously.

In conclusion, as your children grow up, it may be alarming to see them developing an unhealthy relationship money. However, with a little patience and the application of the tips above, you will see them become more financially responsible. It may even help you identify and eliminate some bad behaviours you might have picked up. 

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