Why your child should learn to save at an early age

Rooting the saving culture among Rwandans is one of government’s top priorities as it seeks to improve their welfare and living standards.However, this should not be left for policy-makers alone to drive. Teaching people, especially children, why they need to save for a rainy day is everyone’s responsibility, parents and teachers inclusive.In fact, teachers and parents play important roles as far as changing people’s attitudes is concerned. Therefore, parents need to teach their children from an early age about the saving discipline. The school teachers’ role would thus be helping the children differentiate between their needs and wants.It’s a fact that bringing up children is never a cheap affair. If you ever feel that their budget is being stretched by spending on children, you are not alone.Gone are the days when children learnt the basics in life, like general knowledge about the Rwandan culture, sports and music, for a pittance.Most of these services were offered freely by cultural gurus whereas the rest, like sports and music, was part of the school’s curriculum.Recently, my five-year-old daughter has been putting me on pressure to pay for her dancing and piano lessons.I have tried to convince her that I will personally teach her the Kinyarwanda dance and pay for only piano classes later when I get money, but she will not hear any of it. She insists she wants to join her friends at school for the lessons.Though some expenses, like throwing birthday parties are unavoidable, many parents are forced to dig deep into their pockets to please their little ones. Most children will not understand whether their parents are tight on cash – all they want is a birthday party.As parents, we can provide such, but at a reduced cost by say, combining the parties with the neighbours’ kids. It is difficult to be a ‘good’ parent as defined by your child if you cannot buy everything on their shopping list.At times I am judged as being ‘mean’ by my children, not because I didn’t buy what they wanted, but because they are not contented with my explanations of what is a priority and what’s not.If we understood each on what comes first on children’s shopping list, our children would probably be careful when making their shopping lists. Parents could on their part include something more as a ‘surprise’, depending on one’s purchasing power.I know one shoe doesn’t fit all, and we understand issues like to teach children the saving culture, differently, but we could try and guide them every so often. It does not hurt for a family or schools to have some sort of policy to guide children so they learn to appreciate saving and understand their priority needs at an early age.The Ministry of Education could also include something on saving and entrepreneurship in the lower level education curriculum to create awareness on the importance of saving.Rwanda has set its targets high, including becoming a middle income country by the year 2020 with a per capita income of $1,200; some of the characteristics of middle income countries include a high level of financial discipline.It should be noted that the health of the economy depends on the financial stability of our households, capacity to spend and not being mired in debts.Statistics show that while government desperately needs to raise the savings level to 30 per cent per of the Gross Domestic Product (GDP), national savings stand at 2.1 per cent of the GDP. I commend the National Bank of Rwanda that recently launched a financial literacy campaign and trained 300 teachers, who in turn will set up school savings groups to bolster the initiative.This and more initiatives will help to create a foundation for financial discipline, which is vital for the country’s development.Recently, a friend posted a quote on Facebook from American millionaire, Robert Kiyosaki, thus: “It’s important that you learn to be an entrepreneur or an investor...not a saver. Saving was for past generations when money was actually money.”I must agree that today saving is being taunted as ‘old school’ even by scholars, economists and researchers, who have focused on developing investment and entrepreneurship policies to boost development. One thing though is clear; how can you be a multimillionaire without saving?In a similar move to increase savings, the government is expected to mobilise more revenue through the introduction of private pension agencies once a bill that is before Parliament is approved.The recent central bank quarterly monetary policy and financial stability statement indicates that there are at least 53 private pension schemes managed by insurers.With a saving discipline from childhood, and more products being developed by government as pension avenues for savings, we can be more optimistic about a descent life after retirement.The writer works with the Private Sector Federation PR department ------------------------------------------------------------------- Why your child should learn to save at an early ageRooting the saving culture among Rwandans is one of government’s top priorities as it seeks to improve their welfare and living standards.However, this should not be left for policy-makers alone to drive. Teaching people, especially children, why they need to save for a rainy day is everyone’s responsibility, parents and teachers inclusive.In fact, teachers and parents play important roles as far as changing people’s attitudes is concerned. Therefore, parents need to teach their children from an early age about the saving discipline. The school teachers’ role would thus be helping the children differentiate between their needs and wants.It’s a fact that bringing up children is never a cheap affair. If you ever feel that their budget is being stretched by spending on children, you are not alone.Gone are the days when children learnt the basics in life, like general knowledge about the Rwandan culture, sports and music, for a pittance.Most of these services were offered freely by cultural gurus whereas the rest, like sports and music, was part of the school’s curriculum.Recently, my five-year-old daughter has been putting me on pressure to pay for her dancing and piano lessons.I have tried to convince her that I will personally teach her the Kinyarwanda dance and pay for only piano classes later when I get money, but she will not hear any of it. She insists she wants to join her friends at school for the lessons.Though some expenses, like throwing birthday parties are unavoidable, many parents are forced to dig deep into their pockets to please their little ones. Most children will not understand whether their parents are tight on cash – all they want is a birthday party.As parents, we can provide such, but at a reduced cost by say, combining the parties with the neighbours’ kids. It is difficult to be a ‘good’ parent as defined by your child if you cannot buy everything on their shopping list.At times I am judged as being ‘mean’ by my children, not because I didn’t buy what they wanted, but because they are not contented with my explanations of what is a priority and what’s not.If we understood each on what comes first on children’s shopping list, our children would probably be careful when making their shopping lists. Parents could on their part include something more as a ‘surprise’, depending on one’s purchasing power.I know one shoe doesn’t fit all, and we understand issues like to teach children the saving culture, differently, but we could try and guide them every so often. It does not hurt for a family or schools to have some sort of policy to guide children so they learn to appreciate saving and understand their priority needs at an early age.The Ministry of Education could also include something on saving and entrepreneurship in the lower level education curriculum to create awareness on the importance of saving.Rwanda has set its targets high, including becoming a middle income country by the year 2020 with a per capita income of $1,200; some of the characteristics of middle income countries include a high level of financial discipline.It should be noted that the health of the economy depends on the financial stability of our households, capacity to spend and not being mired in debts.Statistics show that while government desperately needs to raise the savings level to 30 per cent per of the Gross Domestic Product (GDP), national savings stand at 2.1 per cent of the GDP. I commend the National Bank of Rwanda that recently launched a financial literacy campaign and trained 300 teachers, who in turn will set up school savings groups to bolster the initiative.This and more initiatives will help to create a foundation for financial discipline, which is vital for the country’s development.Recently, a friend posted a quote on Facebook from American millionaire, Robert Kiyosaki, thus: “It’s important that you learn to be an entrepreneur or an investor...not a saver. Saving was for past generations when money was actually money.”I must agree that today saving is being taunted as ‘old school’ even by scholars, economists and researchers, who have focused on developing investment and entrepreneurship policies to boost development. One thing though is clear; how can you be a multimillionaire without saving?In a similar move to increase savings, the government is expected to mobilise more revenue through the introduction of private pension agencies once a bill that is before Parliament is approved.The recent central bank quarterly monetary policy and financial stability statement indicates that there are at least 53 private pension schemes managed by insurers.With a saving discipline from childhood, and more products being developed by government as pension avenues for savings, we can be more optimistic about a descent life after retirement.The writer works with the Private Sector Federation PR department------------------------------------------------ Teaching your children about money one of the most valuable skills you can pass on to your children is good money management. Showing kids the basic steps, such as how to budget and shop around for the best price, will establish good money habits for life. Here are some tips on teaching your kids to be savvy about how they earn, spend and save their money: start early, encourage saving, pay pocket money for doing jobs around the house, show children how to budget, help older kids get a part-time job and help older kids get a part-time job.Start earlyIt’s never too early to start teaching your kids about money. Children can learn how to save coins in a piggy bank before they understand how to count the right change.Even very young children, including pre-schoolers, can learn the value of money and saving for small goals. Try showing them how much Rwf50 or $100 can buy in the neighbourhood shop. Talk to them about the difference between the things they need and the things they want.These fundamental financial and life skills will serve them through to adulthood.Saving for a rainy dayEncourage children to put loose change in a clear ‘savings jar’ each day so they can see it grow or use the cash to pay for small items like school lunches.Open a bank account for each child. There are plenty of junior savings accounts that don’t charge fees and offer high interest on pint-sized savings.Take your children to the bank where they can make their own deposits. This will make them feel responsible for their own savings.Consider saving as a family for something fun like a holiday or a visit to the park. This is an opportunity for parents to demonstrate good money management. It’s also a way to naturally introduce finance topics to the dinner table. You can work on a joint fundraising project, pool your money and build the family savings.Pay pocket money for doing jobs around the housePocket money is a great way to teach children that money has to be earned and doesn’t magically appear from ATMs. Set age-appropriate tasks for your children like helping with the gardening, washing up or putting the bins out. Pay them a small amount like Rwf500 for each job they do. Draw up a job chart to let your kids tick off their tasks.Show children how to budgetLearning to budget is an important skill. Teach your kids how to budget by giving them a combination of notes and coins in their pocket money. This teaches them how to handle different sums of money, and they can immediately put a few coins or notes aside for saving.www.moneysmart.gov.au