Help your kid become money-smart

If I may borrow from my childhood about two decades ago, I grew up knowing very little about money.

The only times I handled money were when I was sent to buy something or given the occasional allowance for an outing. But my first real experience with money came was when I joined Form One.

During my first term in boarding school, I did not now what to do with my pocket money, which I kept carefully hidden in a corner of my suitcase. After about a week, I saw the other students spending their pocket money at the school canteen so I decided to do the same.

I was 13 at the time and had no idea how to budget, so I had this nagging fear that my money might run out before my parents came to visit me. To cut a long story short, when school closed, I went back home with some of my pocket money. The whole family had a good laugh at my expense.

Come second term, I was a lot wiser, so by the time school closed, I had used all my pocket money. Once again my family laughed at me, asking what had happened.

I had spent all my money after heeding advice from my older sister, then in Form Three, that pocket money was meant for buying chips, bread, soda and queen cakes!

Like me, many people will tell you that the first time they began handling their own money was when they went to boarding school. Handling money is not something you learn in school, but from observing your parents and peers.

Many parents are reluctant to introduce their children to money and try to hide it from them instead. This fear is based on the belief that a “money-wise” child might use this knowledge to access items or places they deem inappropriate.

But thanks to the current pace of development, with facilities such as the Internet making communication easier, some parents have realised that it is better to educate their children on money matters from a young age.

A money-smart child — one who knows how to plan for their money — has a life skill that will definitely serve him well in the future.

So it’s much better for children to learn about money from their parents before they are influenced by the readily available but sometimes distorted images of what money is all about from their peers or the media.

In fact, following this realisation, some parents have gone a step further and are taking their children for formal training on handling money.

At Nurture Smart, an institution that trains children on money matters, they are taught concepts such as spending, saving, investing, earning and giving away money, says Purity Nyamu, the programmes director.

Surprisingly, says Nyamu, a child begins understanding the importance of money at about the age of two years. At that age, the child is able to read his or her parents’ reactions towards money.

Unknown to many parents, the child can tell their attitude towards money from what he/she hears them saying, their shopping habits and from the general mood when they have money or are broke.