Arguably the greatest Marathon Runner of all time, Eliud Kipchoge once said that ‘only the disciplined ones are free in life.’ One area that requires critical discipline is when dealing with finances or saving money. Being truly free in life and ensuring that your hard-earned money effectively works for you requires that you are extremely disciplined in handling it.
It is never too late or too early to start planning and streamlining your savings and your financial journey. In most parts of the world, parents are training their children on developing a savings culture from as early as 7 years. This means that the child will have plenty of time to learn about saving, spending and budgeting as they get ready to enter adulthood.
Finance and planning coach Samuel Njuguna says discipline is one of the most critical requirements in anyone’s saving journey. He says that this is especially true to the younger generation. Samuel Njuguna built his life and career on utilising technology to build solutions in finance. He says the secret lies in planning and having a clearly defined goal or goals.
“I realised that I didn’t have a savings discipline way too late. So the whole act around discipline and learning early is so that you learn from others. And guardians who can teach you so that you don’t end up making mistakes which other people have already experienced,” he says.
“Interestingly enough, kids are aware of things like delayed gratification a very early age – from as early as four years. Kids do understand the whole concept of delayed gratification, which is very pertinent to anything touching on money. Two, kids who understand delayed gratification very early eventually also become very good when it comes to education, things that require patience and then over time you cultivate whatever you had invested in.”
“Most of the techniques around saving and investment start as low as three to six years.”
This year, the government introduced a book on financial literacy under the Competency-Based Curriculum (CBC). The book is openly accessible and KICD has been giving parents practical examples on how to guide their kids around finances. Kids also learn a lot through doing. Today, people are seeing an increasing need of financial literacy. At the same time with the rise of social media there is a further increase in the need for early education on good financial literacy because of the competing interests now at kids’ disposal.
Is It Too Late To Start Saving Money?
The understanding around financial literacy with most people is something that needs to be corrected. There is always an assumption that financial literacy is a skill you can easily pick. People also underestimate how long it takes to build a habit of saving money.
As a parent, you have the power of molding over your kids. This is a bit different in adults. Kids have their own way of thinking and viewing things.
“Debt has more punch to it than saying, ‘it’s just another loan.’ You need to know you’re going to pay it. There are other competing needs; you need to understand that it’s important to create an emergency fund because anything can happen, or you can get opportunities in future which might require money and can lead to more to more outcome.
“With social media, that social pressure bar has is very low. You now have kids being exposed to social media from as young as 8 years. The bias around social media is that people try to form a certain image. It is therefore good to start having meaningful conversations with kids at as early as 7/8 years.
The best way kids learn is by doing. You can implement the easier tasks or activities kids can do at home, like paying for electricity tokens.
There are two things that are viewed as polar opposites; On one hand, you’re trying to teach moral concepts per kid, but at the same time, there’s this economic angle you are trying to inculcate in the kid.
For the moral aspect, you can say there are some things that are mandatory that the kid needs to learn, for example, making bed and rising early in the morning. There are also these other things that we can decide on how much you’re going to earn and the best way to decide on how much you’re going to pay.
Advice For Those Looking To Start Saving Money In their Twenties
For someone who is amassing a small kitty, it is always important to go and try to try out a small business. If it works out, the better. At that age, there are some things we are very keen for you to acquire. These include building businesses, negotiations, sales, and making a pitch, etc. These skills are a bit different from just pushing money aside.
Saving Money And Setting Financial Goals For Your Kids
It is always important that kids see that there is a journey towards whatever they are aiming at, and that essentially means is even the way they frame their mind is that this is not an instant thing. It’s a journey to it. There are things we need to forego, but we can see at what point we’d expect to get there, depending on how much we are putting aside and what the goal.
The whole idea of having that goal is that it makes it more palatable or bite-sized. If you don’t know what your savings goals are, it becomes very hard to define where you are headed.
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