Kids And Money: 5 Ways To Start The Conversation

Children feel empowered to learn about money and financial independence when they understand basic concepts

- Bomikazi Zeka, Abdul Latif Alhassan

When it comes to teaching young children about the world, parents may feel that some topics like politics and religion are too tough to broach. Money is another. Parents may not feel like they know how to approach the subject, or worry that they don't set a good financial example for their kids.

But money talk shouldn't be avoided. Talking about it is the first stepping stone towards financial knowledge and, ultimately, to financial independence. Holding off the conversations for too long can leave your children in the lurch later in life. For instance, in South Africa, only 42 percent of adults are financially literate. In Ghana the figure is 32 percent and in Nigeria 26 percent. This means a large number of adults in these countries don’t know or understand financial concepts.

This highlights the importance of starting the money talk conversation early to ensure individuals develop the knowledge, skills and confidence to successfully manage their finances.

Perhaps your child receives an allowance and you feel this is enough to familiarise them with the concept of saving and the value of money. But studies have found that an allowance is most beneficial when it’s paired with guidance on savings and budgeting.