Have you ever experienced the consequences of poor money management? Found yourself falling behind on loan repayments or without enough money to last you through to the next payday? Children are observant and fast learners and may pick up poor habits like these faster than you can imagine.

So, to help them avoid these pitfalls, start teaching them about money now.

Here are some practical ways to give them a headstart in learning about money.

Show them how to use a savings jar

Let them put coins into a clear savings jar to help them understand how money grows. The money should be for a specific purpose, like purchasing a toy or a game. If yesterday they saved a KSh. 10 coin and today they placed a KSh. 5 coin, this will practically teach them that when you save, your money grows with each deposit. Don’t forget to make a big deal out of filling their jar with money.

Open a savings account together

If the savings jar was a long-term “account” for your child, once it fills up, take them to the bank with you and open a savings account from the contents of their savings. This will teach them the value of gradually building up their savings and will also be their introduction to the banking industry.

Show them stuff costs money

When teaching children about money, it’s not enough to say, “That toy car costs KSh1,000, or a lollipop costs KSh10.” Show them and let them experience how money works. Allow them to take a few shillings of the savings in their piggy bank or jar and spend it at the shop or supermarket. Let them hand it to the cashier so that the lesson can have a bigger impact.

Teach them to budget

Budgeting is a crucial life skill you can teach a teenager to set them up for early financial success. No matter how much they make, now is the time to get them started. Begin with the basics, such as:

  • Writing down the monthly income.
  • Recording monthly outgoings.
  • Identifying between needs and wants.
  • Setting goals.
  • Paying off loans and sticking to the plan.

Teach them by example and show them how you budget for household items so they can learn from your experience.

Guide them on how to make money

During their free time, teenagers can be shown how to earn some money by either getting them a job or, better yet, helping them become entrepreneurs. There are a number of businesses they can start to try and turn a profit. If your job allows, let them tag along to see what you do for work and expose them to your work environment.

Let them earn an allowance

Give the little kids tasks to accomplish around the house, like making their bed, putting away toys, and emptying the waste basket. The bigger kids or teenagers can wash the car, do laundry, tidy their rooms, or make dinner. The goal is to teach them that money is earned, not just dished out.

Set a good example with good money habits

Kids are always watching, so it’s important to set healthy habits for them that they can follow when they get older. Bad habits like impulse buying may make them think it’s okay to buy things on a whim.

Instead of caving when they want a snack or a toy at the supermarket that is not in the budget, make them wait until it is planned for or ask them to use their allowance.

Teach them to be content

Teenagers spend a lot of time on their phones, most probably scrolling through social media. And every time they are online, they are probably watching stories or reels of their friends, celebrities and content creators. So, once in a while, you might hear, “So and so has the latest iPhone, bought this trendy jacket or went to this restaurant.”

This is the quickest way to fall into a comparison cycle. Children should be taught to be content with what they have, especially if it’s not a need. Teach them to make do with what they have, and if they really need those gadgets or games, encourage them to save up for them.

Make them contribute to purchases

Parents know what it’s like to be overwhelmed with requests for games, toys, gadgets, or outings to the latest trendy locations. Instead of giving in to their requests all the time, please encourage them to pay for part of the purchase to give them a better sense of what things cost.

Financial literacy empowers everyone, and by imparting financial skills to children from an early age using these activities, you are setting them up for success.