Tag Archives: finance

Financial Literacy crucial for Children


I will never forget the time when still in primary school my elder brother told dad that he wanted to wash the cars of the neighbors as a way of earning some money. To say that Dad’s response was negative is an understatement. These were the early 80s and in most families, the notion was that exposure to money would spoil a child. All a child had to do was to read hard, pass and start earning money after university. Huh!!!

Then came the time we finished school and had to fend for ourselves. I am sure even you reading this has done some really nasty mistakes with your finances when you begun earning. Mistakes that make you suspect that you were probably facing a moment of temporary insanity. Things that should be simple like budgeting and saving sound like Greek to many adults out there. The problem boils down to Financial illiteracy/literacy.

Financial literacy is the possession of the set of skills and knowledge that allows an individual to make informed and effective decisions with all of their financial resources. (Wikipedia)

The habits of children around money are set by 7 years of age according to Researchers David Whitebread and Sue Bingham of the University of Cambridge. What does this mean? Parents have to get an early start teaching the children concepts like thriftiness (carefulness, restraint, caution) and delayed gratification.

To avoid a repeat of what we went through trying to become financially literate, we need to put alot of effort in the young children we are raising. Below, I share with you some of the foundational skills they need, you could add onto these;

Responsibility. A child should be able to take on certain duties in the home like mopping their bedroom, washing clothes, cleaning the table, washing plates, clearing the compound among others. This has a linkage with the level of responsibility they are likely to show with their finances.

Spending Decisions. Allowing children to make simple decisions in this regard while scaling them up as they grow will reduce on your need to decide for them when grown up. Financial decisions are some of the most impactful decisions in our lives.

How to Spend. One of the first lessons I teach my children below 6 years is the identification of money. They should be able to identify currency as well as differentiate the denominations. This is followed by them understanding the meaning of Expensive and Cheap.

What is Money and How do we get it. We take things for granted that people must know what money is, however it is crucial that the children get to know what it is and it’s characteristics, top of which is that it is a finite resource. It will not always be there at your disposal. This goes hand in hand with helping them learn how we get money. There are various activities in the home that you could engage them in and pay for their labor in return. It could be washing the carpets of the car, looking after the chicken, compound sweeping or even engaging in a home business.

Delayed Gratification. This is the ability to postpone an immediate gain in favor of greater and later reward. Often times, parents make the mistake of dashing to meet the demands of their children just to make them happy. However, it is important for the children also to appreciate that good things come to those who wait.
When our son was in Primary Three, eight years old, he wanted we the parents to buy him a bicycle. Indeed it was a good thing to get it for him. While we could afford it, we sat him down and told him to consider buying it himself. After thinking through, he came up with the idea of saving his school break time money and that is when we gave him a target to raise at least 50% of the cost of the bicycle and we would top up the remainder. The young man got so determined that he saved and within three months was able to acquire his bicycle. Ever since, he never bothers to ask us for money when he wants to buy something.

Responsibility for Money. A child should be able to know how much money they have spent, earned, are planning to use for future needs among other things. This takes us back to the element of responsibility we talked about earlier. They basically learn how to be accountable.

Saving. This is one element that lacks in many African settings and is taking root in the developed world through the credit driven lifestyle being promoted. Saving money is a precursor to investment. The earlier a child gets to learn how to save implies that the earlier one can introduce them to the concept of multiplying their money (investment). There are times when my son lends me money and even asks for interest. He is so strict that he even keeps records.

Banking. The older they get, introduce them to banking. Help them get a bank account that they can manage and use to save and spend the money they own. This should be an upgrade from the use of the savings box at home.

Wants and Needs. Get them to understand the difference between Wants and Needs. A need is something that is very vital for your very existence or well being like a house, clothing, transport, school fees etc while a want is something that is unnecessary but desired like having Pay TV subscription, Purchasing sweets or ice cream among others. The clear list of needs and wants is determined by numerous factors among which social status and economic positioning come into play.

These are just some of the skills crucial for imparting in the young ones to help ready them for a whole life ahead dictated by finances and making financial decisions. What, do you add onto this list?

James Wire
Business and Technology Consultant
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@wirejames
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I am a student. Can I do business?


“… I am a 14 year old student currently in my Senior 2. I am very much interested in doing business but every one I talk to discourages me including my parents. They say that I will not study well if I start business right now. Is it true that students can’t do business?”

This is an inquiry I received a while back and it sent me thinking. I will start by recounting two efforts I observed during my days as a primary school pupil in Buganda Road Primary School.

The first one was of my elder brother who having observed how people with cars in our residential area were ready to pay for any one to wash them approached our father and asked him for permission to wash cars. He had a decent albeit verbal proposal and it was one of him washing cars during the holiday season, saving the money and using it to contribute to his school fees. My father being the traditional civil servant who believed in ‘studying hard and looking for a job thereafter‘ vehemently objected to this proposal. Being the obedient son that he was, my brother dropped the plan.

Two classes ahead of me in the same school was a young man by the names Salim Uhuru. Each time class ended, he religiously found his way to downtown Kampala to work in his father’s restaurant performing menial tasks like taking orders from customers, serving, manning the register among others. When we completed primary school, as some of us were proudly embarking on our new lives in the then prestigious secondary schools, his father took him to a day school in the city so he could continue with his school/practical business education. Today, he is the proprietor of Uhuru Restaurants, having inherited his father’s business and has gone ahead to more than triple its worth.

These two stories teach us that young people too can have business ideas and even actualise them given the chance. We also learn that given proper guidance, the young can also run business and grow it alongside their pursuit of traditional education.

Teaching the youth how to earn and manage finances from a young age is crucial

Teaching the youth how to earn and manage finances from a young age is crucial

I grew up in the era where parents believed that successful people had to be Doctors, Lawyers, Engineers and maybe a President. Any one who deviated and tried to do anything out of the ordinary was looked at as a loser. This is the mindset society had then about musicians, DJs, Sportsmen and Sportswomen among others. Business was regarded as a route for failures who couldn’t get employed. Its probably the reason why for many years the known rich people in Uganda were mainly those with low formal (western) education.

The fear of money derailing a child in school is justified but it can also be managed. After all, from experience I know too well that even if you are shielded from making bad financial decisions as a young man or woman, the time comes when you have to make decisions independently and the mistakes you would have committed earlier with less repercussions come back to haunt you this time with even bigger repercussions.

So, my verdict is that as a student, you can do business. However, you need to study the circumstances under which you will operate. Your approach to this as a student in boarding school is different from that of someone in a day school.

There are numerous possible ‘light’ business ventures one can embark upon in a school like;

  • Selling Snacks: You can invest your pocket money in buying long lasting snacks, keep them for sale to students at a time when they have run short of theirs. I bet you they’ll buy like crazy depending on the choice of snacks. My son in Primary 6 and my daughter in Primary 4 when offered their favourite bottled Hibi Juice decided to start selling their allocation to other pupils for a profit. To-date, whenever they stock this bottled juice, orders from their classmates simply overwhelm them.
  • Selling Branded Clothes: With lots of cartoon caricatures and celebrities that have a cult following among the youths lately, one could print T-Shirts with these images/pictures and offer them for sale.
  • Scholastic Materials: Pens, Pencils, rubbers, sets, rulers, exercise books are some of the highly consumed items in any school. By stocking and selling to fellow students, a decent sum could be made. My daughter did stock Pens and Pencils in her Primary 3 and used to sell to fellow pupils that were in need at school.

Since business is best done based on identification of a need in one’s environment, your task will be to find out what that is around you that can be exploited to make money and yet also offer a much needed solution to the community. Just make sure that you do not slacken on your academics as they are equally important.

To the parents, develop an open mind, start exposing your children to finances as early as possible. The earlier they learn financial prudence the better because they’ll start making more concrete decisions earlier on in life and have a good head start. It’s not so much about how much one earns but how wisely one utilises what they earn.