Money Conversations in African Households
(The testimonial included in the story below was given by Mercy -not her real name- who’s experience illustrate the challenge African households go through in involving children in household finances)
Most African families shun away from having money conversations. Growing up in a small township around the lake region in Kenya, we struggled to have 3 meals a day. I would often ask in between a meal what we would have for the next meal to weigh if I needed to put aside a portion in case, we had to take black tea only as our next meal. Responses from my mother were often inadequate, she would hide behind the “God will provide by then” to make us comfortable with our situation. My dad was the sole provider, he would come home tired often carrying what was to be our next meal; sometimes he came home dejected and empty handed. We would not question the look on my mother’s face on such days, we were taught to be content, appreciative and pray over difficult situations.
When my father passed away, we realized how much debt he had gotten himself into while trying to make ends meet. We never knew what precisely he did for a living, he provided and that was enough. Most African families are centered this way; money discussions with older people are uncomfortable, as long as your basic needs are met children are required to be content. In the church, money is characterized as evil yet capitalism has driven us to a point where it is a need. When submitting prayer requests, we cloth our problems instead of alluding that money is what we entirely need to discharge a relative from hospital or pay for our hospital bills.
Most people who hail from families with backgrounds such as mine, work hard to better their lives. Once they attain the middle-class status their children go through another cycle of dependency only that this time their needs are met on time, their wants are guaranteed as long as they ask. In this kind of setting, parents spending patterns are influenced with their children’s financial environment.
Children are cushioned from the reality of scarcity from an early age as their demands are met upon enquiry, this directly influences their spending patterns in adulthood according to a research conducted by Financially Fit Africa. When a child partakes in financial budgeting and decision making in the household, they become aware of their financial responsibilities from an early age and are likely to exercise the principles of wealth management.
A report by researchers at the University of Cambridge commissioned by the United Kingdom’s money Advice Service revealed that kid’s money habits are formed by age 7. Parents directly influence their children’s financial behaviors. If children are taught from an early age how to make money chances are when they become independent, they will not wallow in student loans. How do you then include your child in financial planning?
- Teach them how to budget, plan and save.
When writing your shopping list, make them come up with theirs too. Ensure they indicate the prices then take them through it and make them understand the difference between immediate needs and wants.
After differentiating their needs from wants, buy them a piggy bank to ensure they save towards the intended purchase. Break it down to them how long they will need to save in order to buy the bicycle they want, the toy they need and make a promise that if they attain a certain target you will top it up.
By this, they will learn the art of saving, planning and rewarding oneself after attaining a goal.
2. Teach them the essence of delayed gratification
In the supermarket, children will pick snacks that were not budgeted for. If encouraged this will become a habit and push them into becoming impulse buyers in the future.
To ensure they exercise self-control, put aside a jar for their daily expenditure and ensure they save towards buying the snacks. This money should be accounted for after they are rewarded from their work.
3. Teach them about responsibility and reward
Motivate them to help around with house chores by rewarding their efforts. They develop an understanding of working to meet their financial goals.
Simple house chores like washing utensils, going to the grocery stores, washing the car, moping the house should be efficient for them to learn.
4. Lead by example
Adults who are extravagant with money, raise a generation that will have no idea on saving and investing.
Repetition guarantees habitual actions. If they see you set aside money monthly and plan for it they eventually learn how to budget.
5. Let them make mistakes
If they saved towards something and decided to splash all the money to buying a toy, Let them!
Let them use the words, ‘I regret getting this,’ ‘I regret spending all my money.’
This teaches them a valuable lesson on savings.