How To Raise Financially Literate Child
How to Raise Financially Literate Child
How Much One Saves is More Important Than How Much One Makes
Chuks U.C. Ukaoma, Yahoo! Contributor Network
Every parent starts out with an inextricable desire to raise a child who is more successful than the parent. Regardless of how good that parent had it growing up, he or she wants the child to have an easier path than the one the parent traveled. This aspiration is as ageless as time itself. It transcends religion, race, culture, and nationality.
Parents everywhere love their children as much as parents anywhere. Just don't tell that to offspring of African parents; we believe our parents are the most loving parents on earth. That mindset is largely based on the fact our parents overcame multitudinous hardship to raise us. However, history teaches us, some (if not most) of the difficulties people experience in life are self- or society-inflicted. The afflictions come in form of corruption, civil war, having more mouths than one can feed, broken homes, intolerance, avarice, poor health and financial habits. There are things one can do to ameliorate these problems and attain successful individual results. One of the keys to a better outcome is practicing sound financial habits. It's not only a matter of one knowing what to do but also implementing what one knows.
Even in this Eden we reside in with modern conveniences such as 24-hour supermarkets and ATMs, in-house refrigeration, social safety net, reliable electricity, and accessible health care, many of us in Diaspora have come to realize the inherent thrills of being parents. We're waking up to the truth in the Alayi's adage that all roads to Arochukwu are fraught with challenges; that the Hot Chocolate did not mean it when they sang that "heaven is in the back seat of my Cadillac". In my humble opinion, people don't begin to truly appreciate their parents until they themselves become parents, even under the best of circumstances. Any way you slice it, raising a family is a monumental financial endeavor, albeit it a rewarding one.
Part of being better parents is teaching our children the skills they need to live successful lives. In this global village we now live in, it's paramount to learn and practice sound financial life lessons. If a child wants to become financially endowed, she or he needs to learn the positive habits of the rich. Those who ignore these facts of life often pay a heavy price. Yet studies show parents would rather prattle about the birds and the bees than teach money lessons to their children. It does not help when some parents misinterpret the Bible quote: that "the love of money is the root of evil" to mean money is the root of all evil. Some say that "lack'" of money is the root of all evil. If a content person has some reserves, he or she would be less inclined to do just about anything for money. On the other hand, a hungry and desperate saint would sin in no time for that steaming porridge.
A friend Raymond Matthews said it best when he stated: "often in life, what money cannot buy, the individual does not need". That might sound harsh or extreme, but if you rationally think about it, it makes sense. According an antipoverty Youtube video, "At the start of the 21st century, 1.2 billion people live in abject poverty. More than 800 million people go to bed hungry and 50,000 people die every day from poverty-related causes". Na Shakara (lack of money) be dat o, to paraphrase the Great One Fela.
Each child ought to acquire basic financial skills before entering high school. In these times of joblessness, excessive student and credit cards debts, your child is likely to rebound to home and cause you lots of problems later on if you don't arm them with these life-long skills. One of my bicycling buddies once told me that the best thing any parent can do for a child is to help the child become financially independent as soon as possible. Having a good paying job is no longer good enough; your child should know how to manage his or her resources. Per Jim Rohn, "if you work hard on your job, you can make a living [live paycheck to paycheck]. If you work hard on yourself [by acquiring prudent financial skills], you can make a fortune" and have true financial freedom. It's not how much you make that matters, it's how much you save.
As parents, we should be careful about sending mixed financial messages to our children. Parents should not calumniate the importance of money. Desperate persons do desperate things. Some let opportunities pass them by and in desperation they spur their children to accumulate immense student loans or play dangerous sports to fund their college education. What seemed like a good way to "beat the system" today may haunt them and their children for years to come. Ask a few retired athletes or former high-income earners. Google my article: "Should You As Parent Encourage Your Child To Play Dangerous Sports". I laid it all out there.
Start early! "One important thing to remember about children and financial literacy is that it is more helpful to begin teaching children about money early on instead of waiting until high school", per Sara Berthiaum. It is amazing what the human mind can absorb when it is open and eager to learn as children's minds are. That's why they learn languages and new things quicker than most adults.
I credit my parents, particularly my father Lawrence Okoronkwo Ukaoma for teaching me early in life the virtues of saving money. One particular teachable moment is engraved in my mind. I was around 8 years old and the brutal Nigeria-Biafra civil war was raging. I had done chores for a neighbor and was paid in wrinkle-free Biafran notes. Thinking I had become rich, I went to my father and asked him to safe-keep the money for me. He asked me why I could not keep my money. I responded that I did not want to be tempted into spending or losing it. He told me "it was okay to be tempted but I should learn how to control my money because how I manage my resources would determine my altitude in life".
My father also taught me about savings account, stocks (shares), and real estate investment. He made sure I learned that how much one saves counts more than how much one makes. In my early teens, I had an account with then Federal Savings Bank where one could "open an account with just ten kobo". The reader from that era might remember that jingle. The bank was ingeniously operated via post offices. During my teenage years my father would send me to collect rent from his tenants and deposit the funds (and coupons/dividends) in his bank account as soon as possible to earn interest. He taught me to remove my "going out" clothes and put on my "stay at home" clothes as soon as I got home so my good clothes would last longer. He taught me how "a stitch in time saves nine" and how to defer gratification. If it could be done during and shortly after a civil war, it can be done today. Say what one may about Nigeria, I am very grateful for my Nigerian heritage. Most of what sustains me and other folks like me today were learned in Nigeria. I learned good work habits, independent-thinking and content-living from my upbringing in Nigeria.
Developing money saving habits should not be misconstrued as depriving one's self. Rather saving money is a way to develop a nest egg for you (not someone else) to use when you really need it. It is something everyone should aspire to accomplish. Money may not be everything; nothing is. No one should diminish its importance. Like good health, many people may not realize its essence until they don't have it and need it.
Who says sound financial skills are not important in life? Studies show financial issues are at the core of most marital discords. These problems are exacerbated when warring parents use money as ammunition in the battles over their children. Financial education is the beginning and lasting casualty in that no-win war.
Some financial institutions now have a no-minimum saving account. Take your toddler to a financial institution and open a savings account for her or him. Start with doing an online or telephone research to find out the incentive for new accounts. Some banks will give you $25 to $250 for opening an account for your child. Several online as well as brick and mortar financial institutions want to have life-long financial relationship with young people. Let these banks pay up to earn your child's business.
The decision as to how much to give your child in allowance, if any, is yours as a parent. Some give allowance to their child for household chores like cleaning their room, toilet or washing dishes, etc. Others give allowances for no reasons at all. Personally, I give an allowance for chores beyond what my children should be doing as members of the family. And I would make sure the money is deposited in the child's account to "cool down" and earn interest for a while before spending any of it. And if the child needs to spend some money, he or she needs to research it before buying.
Please stay tuned for Part 2
Chuks UC Ukaoma resides in Texas, USA. He's an Old Boy of Methodist College, Uzuakoli, Abia State