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Dr Sanderson Abel
As parents, sometimes we are tempted to think that money issues are too complicated for our kids to comprehend or appreciate. This view is wrong. Psychologically, it is never too early to educate your child about money.

Sadly, according to many studies, parents are more likely to talk to their children about having good manners, getting good grades at school, or religious values than they will discuss good savings habits.

It would be interesting in Zimbabwe to ask parents how often, if at all they talk about financial matters to their children. However, financial literacy for your child is about the best gift you can give to your child, especially if you start at an early age. Most parents, however sadly feel that they know enough about money and finances to teach their children about saving. So how financially fit is your child? Are you teaching your child about saving? It is however, a little simpler than we think. And it can be fun too. Here are a few tips.

Lead by example
One of the best and simplest ways to introduce the concept of money to your children is to lead by example and to use practical or hands on approaches. For instance, the next time you plan to make a deposit or withdrawal at the bank, bring your child along with you and explain what you are doing and why you are doing it. Fortunately some of our banks in Zimbabwe already have child friendly banking halls and children’s savings products.

However, more importantly, in addition to explaining why you need to save money. It is crucial that we embed in our children, the ideals of hard work, earning ones’ living and saving part of our income for the future. This should be done at an early age.

Espouse the values of hard work.
It is important to instil in the child’s psyche, the notion that money doesn’t grow on trees, it must be earned. And interest on savings is just one neat way of earning money.

Teach your children about the various sources of income that adults have. However, remind them that as a parent you don’t get paid for nothing, you earn your money by making a useful contribution to your employer or to society if you are a business person. Take the opportunity to remind your children of this every time you give them their regular allowance. In as much as you ask them how much of their allowance they give as a tithe offering at church, also ask them regularly how much of the allowance you give them is being saved.

Kids can save at home in piggy banks and mini safes and so forth but this is less desirable. Get your kids to save in a proper bank account. If your bank has account facilities for children, take advantage of these and help your kids to open their savings accounts. It is a lot more pleasurable for your twelve year old son to have their own savings account ATM card, rather than a piggy bank at home, which they can raid at any time. Your child will enjoy once every so often to take a trip to the bank.

Also use virtual training tools
In addition to practical lessons in savings alluded to above, there are also many virtual tools parents and children can use to educate about money and help develop savings habits very early on. Games like ‘Monopoly” teach children basic business skills, saving and investment being one of them.

Play on the children’s desires
Your child really wants a new bicycle or the latest play-station gadget or game-boy. Do not give the child the money all at once, even if you have the money. If the item costs for example, US$200,00 get them to save for it from their allowance over a few months. When they have saved a substantial or the entire purchase price, allow them to buy the item, and then replenish part or all of their savings. Allowing your kids to build savings towards a goal not only teaches them patience and other good habits but also makes the experience all the more enjoyable when they get a sense of achievement at the end.

Reward kids for saving money
Reward the little savers. Regularly assess how much each of your children has saved and award them bonuses. They may be non cash incentives but you can also reward your child for saving by increasing their allowance from year to year. In other words the more they save and earn interest, the higher their income. It’s a bit like mum and dad paying a little interest for big rewards.

Always remember though that children must earn their allowances in the first place. The allowances should not just be freebies. Tie them to child friendly domestic chores, and getting good grades at school or getting selected for the school soccer team. That way, the children will place a greater value on their savings. One cannot therefore underestimate the role that you as a parent should play in educating your child at various stages of his/her development into adulthood about saving, budgeting, recognising needs and wants, and how interest makes money grow and to encourage them to open youth savings accounts to help them better prepare for their future.

Our nation’s economic future depends on the financial well-being of our youth. It is crucial that children begin learning about finances at a young age so they are better prepared to make sound financial decisions in the future.

Teaching the basics of money management can assist your child in developing good financial habits that will benefit them for the rest of their lives while having fun in the process. The country is in dire need to increase savings. Savings are the backbone of investment and economists have already proven that the rate of savings in the economy influences directly the rate of investment. In simple terms for the Zimbabwean economy to grow, we need to grow the national savings base from the current low levels. If we all teach our children to save, we may just be saving the future of our country.

• Dr Sanderson Abel is an Economist. He writes in his capacity as Senior Economist for the Bankers Association of Zimbabwe. For your valuable feedback and comments related to this article, he can be contacted on [email protected] or on numbers 04-744686 and 0772463008.