Pay your child for chores to teach them about money

It is one of the ways financial experts believe will entrench a good savings culture in them as get to learn about money from an early age. Catherine Mwangi a council member of Institute of Human Resource Management (IHRM) says it is not fair for a parent to enjoy free labour from their children.

"Sometimes as parents we enjoy free labour. We will go the shamba and cultivate with our children, and at the end of the day; when we have harvested and taken our tea to Kenya Tea Development Authority and we are paid and ignore to give children their share," she says.

Good savings culture

Ms Mwangi says parents should not assume that since they pay their children's school fees and feed them; then they are guaranteed for any labour they render to them.

"I think we should look at it from another angle where we need to appreciate our children to teach them how to save," she said during a recent discussion by IHRM, Enwealth Financial Services and Strathmore University on increasing saving culture among the youth.

Ms Mwangi says from a human resource perspective, saving culture in the country should start at an early age when individuals are still young so that they can adapt the culture of putting away something for a rainy day. She adds that when a child has assisted you with chores or any tasks, it is important to award them a token since their time and effort have contributed to the successful completion of the work.

"When you get your bonus, it is also good to share with them so that that culture will be cultivated at an early age. Let them start saving early and help them to be consistent," she says.

Ms Mwangi says in some communities, like Asian who are entrepreneurial, their children learn this from an early age. If this is adopted among other communities, it will build a generation that is financially sound and easy to manage even at the work place. It will also deal with the feeling of coercion when it comes to saving for pension.

Ms Mwangi is of the view that if your child has taken initiative to perform a chore like washing your car, it means they are not only staying away from social media and the likes but also keeping them busy.

"When they realise there will be an incentive, at least something to appreciate them; they will be doing the chores willingly. After you pay them, do a follow up to ensure they are saving something," she says.

"If you and I were taught to save like that from an early stage, we will not be having problems in our human resource as far as saving is concerned because it will be automatic."

Paying your child an allowance or for a chore done is not a common tradition not only in Kenya but also in the larger African setting. Perhaps if this was done to many youth out there, then slogans like 'you only live once' (Yolo) would not be an anthem among the youth.

Parent's responsibility

"I agree we have a challenge with the youth. They have a concept called Yolo. They really do not care about tomorrow. We need to have such dialogues continuously so that they get to learn," says Dr Shem Ouma chief manager and head of research and strategy Retirement Benefit Authority (RBA). Enwealth Financial Services Chief Executive Officer Simon Wafubwa says the responsibility of teaching children about money solely lies with parents.

"It is not right at all to fully delegate responsibility of learning about money to teachers because they may not execute it well. It is still a parent's responsibility," says Wafubwa.

And he has a radical proposal: "Next time you are going to a chama, why don't you carry along your daughter? We should not make an assumption that they are too young to learn about money." Saving among the youth has repeatedly been described as poor.

Today's saving behaviour as described by Albanas Muthoka, manager pension administration and consulting at Enwealth Financial Services, is that of putting some money this month and then (next month) what you have saved will save you.

Money management

"For our young people to have that discipline and culture of saving, we need to make it part of their lifestyle," says Mr Muthoka adding that the current economic situation should be used as a reflection.

"How I am spending Sh1,000 today will be similar to how I spend Sh1m tomorrow."

Association of International Certified Professional Accountants notes in an article that there are many ways for parents to teach children about money management.

"Money talks often starts by paying an allowance," the article titled How a kid's allowance can teach money management skills.

The article states that an allowance is just part of a larger conversation about effective financial management.

"Parents must make sure the money lessons sink in," the article reads.

While paying children for chores is predominantly a Western tradition, if adopted, it may have positive effects owing to the fact that many youth in the country are glued in gambling.

"Dissuade yourself from the notion that you can make money through gambling. Many youth believe that they will gamble it and make it, that is one thing we need to demystify and tell them it takes hard work to succeed," says Ms Mwangi.