• Money management skills should be taught from an early age
Image: FREDRICK OMONDI
Reports on social media that yet another television star is going through hard times once again highlight the importance of financial literacy, also known as money management skills.
The man, made famous by a TV series, is reportedly drinking excessively. Those who know him say he is a permanent fixture in bars at his area of residence. He is not the only famous person to blow away his fortunes.
Various celebrities are reported to have squandered millions of shillings. Ken Gichoya, popularly known as Njoro in the 'Papa Shirandula' TV series, says although acting pays, most celebrities mismanage their funds and end up falling into depression.
Celebrities are not the only Kenyans having problems managing their money. It’s a fairly common problem across society, with athletes facing similar problems with their vast fortunes. The killing of promising athlete Agnes Tirop in October 2021 highlighted the problems athletes are facing. Several other athletes have died in suspicious circumstances widely attributed to disputes relating to their wealth.
Athletics Kenya, the sports body in charge of athletics, acknowledges that many athletes face problems managing their newfound wealth. Officials say the sports body will provide counselling and financial literacy lessons to help athletes better manage the wealth they earn from running.
These tragic cases prove the need for financial literacy in all sectors of society. Simply described, financial literacy means having the knowledge and skills to make responsible financial decisions. Persons with financial literacy skills are likely to remain financially stable throughout life because they will know how to manage money, where to invest it and how to spend it. As money is very important to modern life, money management skills should be taught from an early age.
TEACHING KIDS
Stop telling your children that you don’t have money. That’s one of the first principles of financial literacy. If you keep lamenting your lack of money, you will not discuss the important principles of money management, such as spending wisely, saving and investing. As demonstrated in the book Rich Dad, Poor Dad by Robert Kiyosaki, you don’t need a high income to become financially stable. Start from where you are with what you earn.
The second important lesson is that money by itself is not evil. The Christian scriptures (1 Timothy 6:10) state that the love of money is the root of all evil. Money is just an object but without it, good deeds will not be possible. Parents should talk openly about money with their children to impart positive values about it. Go shopping with your children so they can learn why you choose the items you do, how to make a budget and why they should stick to a shopping list.
Borrowing is inevitable from time to time. In financial literacy, the key lesson about borrowing is knowing when to do it and remembering that borrowed money must be paid back.
As with everything else, children learn through observation. Parents should, therefore, teach financial literacy through their actions each day.