“Mungu akileta mtoto, analeta na sahani yake,” (when God gives you a child, he provides for it)
These are lyrics from one of East Africa’s greatest band – Sauti Sol’s. This particular song sparked a lot of controversy among Kenyans due to its tackling of the subject on abortion – a delicate, often taboo topic among Kenyan circles. Nevertheless, the phrase has its contextual reference as we discuss the importance of teaching our children about money and the importance of saving from an early age.
Having children encompasses a different sense of responsibility and financial stability is a critical aspect to consider when children are born. It’s important that Kenyans learn how to save and more importantly, how parents can inculcate a saving culture in their children.
Once you become a parent, it’s important to think through your child(ren)’s financial lifecycle from when they are born to when they are no longer dependent on you financially. But the reason it’s so important is that, if we really plan and save for our children from when they are born, life becomes more bearable when they go to high school and university. This is when many couples are forced to sell off the property and anything of value to keep up with the fees (more often than not, money is needed to educate more than on child). One of the beliefs that people have is that every child comes carrying their plate (that somehow nature provides). That’s not a very good planning method.
As we have previously explored exhaustively the topic of raising financially savvy kids; toddlers to preschool, early graders to preteens, teens to young adults and teaching your child how to save, we will explore the benefits of opening a savings account for your children as part of raising kids who understand the role finances play in our lives.
Financial stability is the pillar most child savings account are based on, financial institutions realised the need for parents to plan for their children’s future and at the same time cater to their needs in the present. Concurrently, insurance institutions have developed policies that would safeguard the child’s future with respect to your choice of package.
As humans, it is our nature to ordinarily question the uptake of any product and its direct benefits to us. What separates this settlement is the seller’s bargaining power, the customer’s affinity to the brand and the product itself and lastly but most importantly, the financial standpoint of the intended consumer.
So why consider a child’s savings account?
No minimum balance – unlike other saving accounts that have a capped minimum balance to accrue interest, child savings accounts do not have an operating minimum balance to attract interest. This means that you are at liberty to deposit as much or (as little) money to the account as you are able to.
Introduces the savings concept to your children early – Involving our children in saving at a young age will enable them to familiarise themselves with the concept of saving at an advanced age. This is will, in turn, teach them to take responsibility and manage their money under your supervision.
Promotes the creation of wealth – The savings account can serve as a supplement to other aggressive investing strategies. This will take any worry that your child may miss out on potential opportunities that will contribute to their development.
Provide a platform of similar interest for children – children who are saving on the same platform are also able to interact and make friends during the member functions that are held on a periodical basis. These interactions encourage children to practice good saving habits as they grow up alongside their friends and generally develop a positive influence on financial management.
Peace of mind – Through the child saving account, parents will now be able to enjoy better peace of mind, knowing that their children are on the journey towards financial security. In this unpredictable world, most parents’ desire is to cater for their children’s needs even in the unfortunate circumstance of their demise.
An important fact we should have in mind is, securing our child’s future is among the greatest gifts a parent can offer their child and through opening a savings account for your child you will have already began the first step journey towards financial refuge.
One of the things parents find difficult is to teach children the value of money. We work very hard to make some money and then we want to give children everything they ask for. You have to teach them from when they are young how to put money away. A good way to start on keeping money away as they slowly understand the concept of a bank account is by giving them a cubby kit which is provided for every Cub Account opened at KCB bank.
When they wash the car or make their beds they get some money in a reward programme that they put away in the cubby kit. When full, go with them to the bank and slowly teach them the concept of a bank as big and safer cubby kit.
I believe that people don’t save for their children because they don’t know the best approach to doing it. Well, now you do.
We would love to hear your experience in raising financially savvy kids and how you go about saving money with them and/or for them.