How to Give Your Child the Best Chance to be a Great Investor


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Every child needs a chance in life to be whatever they would like to be. An investor is one of those crucial roles we must all take to survive these progressive economic times. Thus, teaching children about money at a young age could reap big payoffs in adulthood. Take the example of the third richest man in the world – Warren Buffet. He bought his first shares of company stock at age 11. In the same manner, you only need to start early and give your child a fighting chance to be a money genius.

Here is how you can turn day to day activities into learning experiences about value and how to use money:

Age 2 -3

Age 2-3 isn’t too early and the basics need to be mastered at this age. By the time your child is aged 3, they need to grasp basic money concepts such as commerce and money denominations. While your child may not fully grasp the value of money and its role in everyday life, they can learn to identify the different denominations early.

A great way to do this is to have your child match physical coins to images of those coins while learning the name and number values. Also, to help your child learn about commerce, you can play store at home. Using play money to exchange money for goods or services, your child can begin to understand the basic concepts of commerce.

Age 4-5

By the time your child is between the age of 4 to 5, they will be more aware of money. So, when they stroll along with you to the supermarket, make them more involved in the shopping process. For instance, share your shopping list with them and have them looked out for certain products when walking up and down the aisles. This way, they can feel helpful and engaged in the shopping process.

Also, you should continue playing store at home as they need to grasp more complex concepts such as making change as a cashier and turning a profit at the end of the day.

Age 6-8

This is about the age when children start receiving an allowance. At this age, you’ll need to now teach the concepts of saving – or simply putting aside some money to buy things they really want. With them, make a trip to the bank and help your child open a savings account. While doing so, make a big deal out it and your child will feel grown with responsibilities, and all!

Don’t forget to take some time out to consistently encourage them to make regular deposits to the account. As their savings grow, discuss the concepts of interest rate and how the bank pays people back for saving their money. Ensure your child’s savings account has no fees and no minimum balance. This way, they can really benefit from the compound interest accumulated over the years.

Although the concept of giving and sharing should be inculcated at a young age, giving back ought to be a part of your child’s makeup. Giving back is more than just a financial lesson, it also teaches social responsibility. From a young age, have your child give clothes, donate some money to charitable organizations, buy food for the hungry or simply anything that may interest them. Make it a family project to find out what you can do for the charities that are close to you. Figure out together how you will be able to help and what percentage of donations goes to what causes you want to give to

Age 9-12

By the time your child is 9 to 12, they will have already noticed and asked questions about your shopping habits. For instance, “Mum why do you buy this soap and not that one…It has better packaging?” Take this time of their growth to teach them about comparison shopping. Have them read price labels, look at product size and compare the amount per shilling.

Also, don’t forget to take into account the quality of the product. You can do so by buying high-end brand products one week and the next, the cheapest one on the self. This way, you can have a chance to discuss the differences and decide together if the high-end item is worth the extra coin.

Additionally, with many kids now wielding their first smartphones by age 10, it important to also introduce them to great apps such as Monopoly. These apps will help deepen their understanding of the connection between choices and outcome, and also help manage money and plan for the future. Though, it may not compete with their first love, Snapchat, reaching them through their devices is one of the easiest ways to help them understand.

Age 13-17

I call these the make or break years. By the time they are 13 years, they should have mastered the concepts of identification of money denominations, commerce, making change, turning a profit, and comparison shopping. They should also be confident enough about money to make decisions and haggle with customers or when making a purchase. Then, from there you can introduce the stock market.

You can start by playing pretend by investing in your child favourite companies such as Facebook and such. Make this a family activity by having every member pick a stock, write it down on a piece of paper – aside note the date and the value of the stock in current day price. Then for the following days, read the paper or watch financial news together. Discuss how the stock value of everyone’s choice fluctuates from day to day.

This is also the time, most young teens have their allowances increased to cater for more i.e., lunch money, school supplies money and other small necessities. Young teens can quickly spend all their allowance if not taught how to handle it. Help your child set a budget by first discussing wants vs. needs with them. For example, potatoes are the food we need to survive, while a new lipgloss though may make your lips look good, it isn’t a necessity. This idea can be reinforced by going over the family budget with your child and discussing your family’s needs vs. wants.

Age 18 and up

At this age, don’t let it go.

We live in a time of plastic money, M-Pesa, M-Shwari and many apps that give easy access to quick money. These things aren’t the same as cash and your child can get disillusioned about how much they can actually spend. Another great lesson to teach here is in financial responsibility.

With a set amount of money in their card, your child can budget their allowance. This way, when they go off to college they can live within their means and not seek out lenders to finance their lifestyle.

From Piggy Bank to Profits

Parents, grab the opportunity to turn your child into a great investor.

Teaching children about money requires some dedication on your part but it is well worth the effort. Get them learning early, and get those good investing habits down, wealth building started to increase their long-term odds. Your child does not need to be born with a silver spoon to scoop up riches at a young age, just great resolve and persistence, which can be learned young. At the end of the day, Just keep it simple and in time, who knows what kind of abundance they’ll grow into!

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Irene Makanga
Irene has an MBA in Finance and is an avid businesswoman, passionate about financial literacy.


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