A child holding his piggy bank. When the piggy bank is eventually
opened, you can share your achievement of the financial goal set.
Photo/FILE
At the start of every year, I usually
ask my niece, who is now 10 years old, what she would want as a gift the
next festive season.
After making her pick, we walk to the shops to confirm the prices.
During
the window shopping, we compare prices and I tell her why it is
important to settle for affordability. Based on the price of the
selected item, I ask to save for the target and promise to double the
amount.
I also promise to give her coins to save in her
piggy bank or money box until the year ends. As part of the rule, the
money is accessible only once a year and only during the festive season
when people buy thing as part of the celebrations.
KEEN ON PRICES
In
2013, she was saving to buy a Sh700 pair of shoes for a season’s gift,
but she had accumulated Sh450. Not a bad run, I told her.
Remember
I had promised to double her savings. I kept my word and at the end of
the day, we had Sh1,350 to buy the item and others.
During
the shopping, I realised she was keen on the prices, perhaps to save a
few coins from what she had accumulated. Encouraging, what is not?
Her
appetite for savings is now sharper and the young girl is focusing on
more savings and a bigger gift the next festive season.
I
am sharing this experience in this column to emphasise the role of
teaching children on the culture of saving and spending during the
festive season.
Many times, I have been asked by many
parents whether it is healthy to give children money to spend especially
during the festive seasons. It is not bad, I tell them. But they should
be taught how to save so they can understand why they need to be
careful when buying things.
Many parents have tried in
vain to instill in their children the culture of savings by giving them
coins to save in their piggy banks — only for the little ones to buy
sweets or candy.
This failure or the reckless spending
on sweets by children is as a result of unclear target or financial
goal. Without a financial goal, saving becomes difficult since there is
no drive or motivation.
Therefore, to boost their
morale to save, children should be guided on how to choose a financial
goal that drives saving. This financial goal should be in form of a
valuable, perhaps a gift that stirs excitement. The cost of the item should be within reach and affordable in relation to age.
REALISTIC GOALS
For children below 10 years, the cost of the item should be within Sh1,000 so they would find their goal realistic.
It
is important to note that the price of the item should be realistic to
the amount of coins that you give the child to save each day.
Before settling on the price of the item to buy, take the child for window shopping for impact and to compare prices.
Let them choose and note the prices.
As
he grows up, the child will begin to be sensitive to prices when
shopping. Next, set the time frame for saving. For instance, if it is a
birthday gift, tell the child the saving period covers a whole year.
As
he sets up the piggy bank, the parent or guardian should also reveal a
saving plan or target, say to buy a plot or a car. Let the young one
know it is through saving that one can accumulate a significant amount
to buy something of value.
Finally, help the child to
wait until the period is fully covered to reduce the temptation to make
any reckless or impulse spending.
PIGGY BANK
You can offer to triple the amount she accumulates over the period as a reward for financial-goal discipline.
When the piggy bank is eventually opened, you can share your achievement of the financial goal set.
Once
you open the piggy bank, make sure you first buy the item identified at
the beginning of the project. This calls for celebration.
Make
this an annual ritual to teach children the culture of saving or to
meet certain goals like shopping during the festive season.
This story first appeared in the Business Daily
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