Right from birth, kids begin to actively pick up skills and knowledge as they engage with different environments. From the social skills they learn at home to the hygiene skills taught at school, all contribute to their development, but one lifelong skill that is essential and will see our kids through good and bad times is knowing how to manage money.
Some schools may do their bit to teach financial literacy, but it is ultimately your guidance that’s needed to help them find their wings. Given the baseline of poverty and unemployment in Ghana, providing our children with early financial education and mentorship will create sustainable livelihoods for them in the years to come.
Gbenga Okejimi, Country Manager, Nigeria, and Ghana of international money transfer company WorldRemit, has a few tips to help Ghanaian parents teach their kids how to be money savvy.
- Let’s talk money
In many Ghanaian homes, parents may not want to chat about family finances in front of their children. Still, in order to nurture a child who’ll be in good financial shape as an adult, it’s really worth starting the conversation early – without, of course, bringing up any real financial worries.
So, consider chatting with the kids from an early age about routine purchases like food, paying for education, transport, and holidays. Discuss the difference between the things you need such as food, water, heating, and the things you want – holidays, technology and clothes or shoes, like the latest trainers.
When they’re young, take them shopping at the local markets, look at the price labels and pay for items with cash, rather than paying with a seemingly ‘magic’ credit or debit card. Cash is a tangible thing – once it’s used, it’s gone. Kids need to learn that.
- Introduce them to money
As soon as your child can count, introduce them to money. Show them some Ghanaian Cedis and coins and teach them the value of each one. Best of all, play some money games with them – engaging games to help them understand the value of coins, how to count money and work out change.
You can play these games online or as board games. Monopoly is an old favourite that not only gets children handling money but also teaches them the basics of investment. You can also create your own homemade games. After all, what child doesn’t love setting up and playing shop? Play and learning really can go hand in hand.
- Get them budgeting
Whether your children earn their own money with an after-school job or get gifts and pocket money from their favourite uncle, it’s worth introducing the idea of budgeting early. And make it fun!
Yes, budgeting can really be fun if you draw up a colourful chart for them to fill in. Two columns: ‘money in’ and ‘money out’.
For younger children, they can learn to put their money in three different piggy banks or jars – cash for spending, sharing/gifting, and for saving. By budgeting, your children will begin to take more personal responsibility for managing their money.
- Start them saving early
It’s important to teach your children that however much money they may be given or earn – they don’t need to spend it all at once. It is far better to set some goals and save for the future!
In a study done by Youth Save Consortium, young people in Ghana were found to occasionally set aside small amounts of money for future use, and for near-term purposes for example for school supplies and personal care items. Very few used formal financial services and generally did not associate setting aside money with achieving a long-term goal.1
So, help them open a savings account – a digital savings account may be best. After all, our children will be doing most of their banking online in the future. The earlier you get them to manage their finances on a computer, tablet, or mobile phone, the better.
Once they have a savings account – you can look at the monthly statements with them – and explain how the account grows because of deposits and interest. Encourage your older children to put more considerable sums away for something they really want like a new bike or computer.
By saving, your children will learn how rewarding self-discipline and goal-setting can be.
- Working for the things they want
When your child sets their heart on anything from a book to a bike, instead of instantly reaching for your credit card – encourage them to earn money for themselves. No one wants work interfering with their children’s studies or play, but there are small jobs they can do to make a little and pay for the things they want.
Young children can top up their piggy banks by doing household chores. Teens (10- to 12-year-olds) can do babysitting or gardening. And older teens can get part-time work in shops, restaurants, and holiday work in local cafes.
The benefit of this? To give them the responsibility and self-satisfaction of earning their own money and saving from a young age. In this way, they can really understand and begin to appreciate the value of money.
- Spending, not overspending
Now comes the fun part. Once your child has saved the right amount, they can go shopping and then spend within budget. Of course, advise them not to overspend. But as long as they’re mature enough, it’s best to leave the purchase decisions to them. They really need to be in control of their own decisions when it comes to money.
If you help them become smart spenders, you’ll instil in them some valuable lessons about how personal choice relates to managing money.
Distributed by African Media Agency (AMA) on behalf of WorldRemit.
Sources: Youth Save Consortium. The Ghana Experiment. Oct 2015
