Budget challenge for parents
Well, when you are doing your home budget, you include kids’ expenses in that I suppose; toys, clothes, picnics etc.
I don’t know how people with kids do it, but you will often hear parents complaining about one kid being more ‘expensive’ than the other even if they are age mates.
This is a common complaint you get when kids are shopping for boarding schools.
Unless your child has some special needs, there is no need for them to have a long shopping list than other kids of his or her age.
He might just be an extravagant kid who can turn out to be wasteful later in life.
These are some of the ‘strategies’ you can use to help kids grow up financially savvy.
Boarding Schools
Apparently, boarding schools are a bigger phenomenon here in Kenya than in developed countries.
Parents intentionally throw their kids into boarding schools at a young age to learn some ‘survival’ tactics.
Kids who have problems managing themselves.
When you put them in a boarding school and give them Ksh200 pocket money to survive on for one month, I am sure you will end up with an adult who can manage his coins in future.
Giving kids less pocket money is just one aspect of training them to be financially adept. You will be teaching them how to save.
For white guys reading this, let me explain to you how Kenyan boarding schools work.
You go shopping for your kids the necessary things he needs to live; toothpaste, bathing soaps, shoes and uniforms.
That’s all he needs. No snacks are allowed in most boarding schools; things like orange juice and biscuits that he can use to supplement his diet are unnecessary.
You can be lucky if you find a school that accepts foodstuffs.
In most Kenyan boarding schools, you eat life hard; what’s on the menu will be your diet for the next 4 years you will be in high school.
And what is on the menu is usually not something appetizing.
You will only change that diet during the one-month holiday breaks you have.
Damn, it is rough in some of these boarding schools; should your kids lose stuff like clothes, socks and shirts, he will have to borrow or wait until parents day for you, the parent to purchase new ones.
That is it.
With that kind of environment that boarding schools offer, you will not end up with a spoilt, extravagant or spendthrift kid.
He will learn the hard way.
However, from reading that I am sure you know that there are better ways to instil financial discipline in your kids apart from boarding schools.
Parents are advised to raise their kids and not resort to boarding schools.
Use Piggy Banks
My roommate in college had a Piggy Bank.
He has had a Piggy Bank since he was five years old.
I found it funny that at 24 he still kept a piggy, I already had a bank account, so I didn’t understand what a grown-up need a Piggy Bank for.
Anyway, he would put coins that remained after our shopping in that Piggy Bank.
And later use the coins to buy sweets and vegetables.
That’s the idea of a Piggy Bank, to help your kids learn to save at an early age.
Whatever they remain with is thrown into that piggy, and they can later use the collection to do their own things.
TOTO Account
Toto means Kid.
There are other names for these accounts;
All these are accounts you can open for your kids to raise some money for them.
They can use that money in the future to handle their expenses without going into your pocket.
And that is the problem with this article so far or rather the market in general. It is offering options that you the parent can adopt to ‘save’ for your kid.
And not really teach the kid how to make money for himself or herself.
Now let’s flip the coin and see how you can teach that young one to fish and not really give him fish.
This is very important because billionaires and first-generation millionaires did not come from wealthy homes, they made that money themselves.
Warren Buffet says he started trading in stocks at an early age.
Rockefeller was selling candy at a tender age to support his family.
And US steel magnate Andrew Carnegie was working at a young age to provide for the family.
You can’t do those things they did to your kids. You will be arrested for child labour.
You just can’t send them to work while other kids are going to school.
But instead, you can:
Mould Talent
Hey, those kids can actually work if they have talent. We have kids who act in commercials and tv series.
Kids modelling is common in Nairobi.
When I attend commercial auditions, I see a lot of kids coming for roles, and they get paid.
You can use that money to take care of their expenses. And let them know they earned that money.
In fact, let them know they competed against other kids to make that money.
When your kid paints and competes in painting competitions among other kids and wins, he will be happy to have made his own money.
Investing for Kids
You can teach them to invest or buy shares at an early age.
And how is this even possible?
Many schools of thought think that the best way to leave your kids is in a state of poverty so that they can learn how to make money.
One of our successful journalists said that “it is okay that his father passed away”.
His dad was a rich Kenyan politician, and by him passing away when the journalist was a young boy, it forced him to grow up tough and make it on his own…an interesting aspect.
I don’t like the idea of leaving your people in poverty, and yet you have money.
But what it means merely is imparting some financial skills in your toddlers so that they are well equipped with the knowledge to run business and make some nickel.
If you invest in your kids’ education; get them into business school and find them a mentor, you will have done your part in helping them get a head start in investments.
Don’t think you owe them more than that.
When watching ‘The man who made America’, there was a scene with JP Morgan and his father where their ‘strange’ relationship was portrayed.
The father would show up with million-dollar cash and put it on the table.
He would then tell the son to carry the money and feel the weight of that money, after which he would say to the boy to learn how to make money on his own.
You don’t need to go to such extreme with your kid, all it needs is a foundation.
The basics of financial management so that they can grow up with a little financial savvy to manage their money in the future.
But that boarding school part truly helps…
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