Listen to This Article Enhance your reading experience by listening to this article.

Let’s face it: parenthood is tough. There is no one specific method for ensuring stress-free family finances for everybody. But you can avoid financial blunders this year…

With another year of skyrocketing school-related bills, compounded by demands of the competency-based curriculum, parents are charting ways to remain financially afloat even as they meet other family needs and provide for their offspring.

But even as the pandemic and its related effects eats into parent’s pockets, having clear financial goals and working towards them, whilst teaching children how to become financially independent in the future still remain a priority.  

For Ashi Kariuki and Elizabeth Njuguna, financial management skills are sailing them through this difficult season as they juggle the needs of their four children.

The couple believes that being intentional about budgeting, spending and saving, is key if families are to be financially stable.

“I feel we have made progress in money management. We are not in a bad space, but it is a work in progress,” says Elizabeth.

Adjusting to life situations

To adjust to the school calendar, the couple have had to realign their priorities and rework their budgets. 

“The school calendar has eaten into our savings and has forced us to rethink our goals.

To surmount this, we are planning ahead and ensuring we have school fees before each reopening,” says Elizabeth.

Amos Ngahu, a financial coach and owner of Money Clinic, says the surest sign of financial success is adaptability.

“A sign of financial success is how easily a family can adjust to difficult financial circumstances.

Being content with the little they have is always a good sign. Such a family can easily adopt to a lifestyle lower to the one they were used to with no hitches when bad times hit,” says Amos.

He says results of financial management or lack thereof are evident when the bread winner of the family dies.

“Warren Buffet said the chains of habit cannot be felt until they are too difficult to be broken.

Financial failure leads to fights, court cases and threats once the custodian passes on.

However, the transition is smooth for families that have prudent financial practices,” he says.

Children are simple

Overspending to please children is a trap many parents fall into. Ashi and Elizabeth say they are careful not to overspend, lest they mess up their budgets.

“When we overspend, we do so by a small margin. Let us say, if we have a Sh5,000 budget, we will spend around Sh6,000.

It is still a manageable out of budget addition, but we are not overspending to a point we are biting into other needs,” says Ashi.

“A lot of things we buy for our children are not for them, they are for show-off. Children are very simple.

Be careful how you spend your money because your children are watching. Remember children do not listen to what we tell them, they copy what we do,” says Amos.

The prolonged Covid-19 pandemic has left many parents jobless and without a source of income.

Amos asks parents to adopt to circumstances at hand and readily accept them even as they work to remedy them.

Trying to maintain an image that all is well will only worsen the situation.

He says: “Children need to understand how to adapt. It is important for them to be equipped so that if tomorrow you are not there, they will be able to fit into whatever financial situation they find themselves in.”

He stresses that affordability is key. “If a parent is unable to pay school fees in a private school, then they should shift them to a public school for as long as necessary.

Also think in the lines of how can this school fees be paid passively? Think about dividend-baring channels, such as saccos,” says Amos.

Ashi is a firm believer in teaching children to work for their wants. That way, they understand the value of work and need to spend smart.

“If it is something the child really wants, but is not in the budget, they have to work for it, whether it is rewards for performing well in school or money they earn from running errands.

From there, they are able to budget for their wants and whatever they buy becomes more valuable because they worked for it,” he says. 

Teach children about money

Amos also stresses the importance of teaching children to save for a future want. That way they understand that even as an adult, they cannot always buy what they want at a moment’s notice.

“Teach your children delayed gratification. Do not rush to buy. When you tell your children that right now, we might not be able to afford this, but here is the alternative, you are teaching them how to adjust during times of crisis in the future,” he says.

Apart from working for their needs, financial literacy in the home comes in handy in teaching children to save.

“We have a 10-year-old who is very inquisitive about money and is keen on saving. We encourage him to save every coin he gets including birthday money from his grandparents and the little he earns from errands.

But because he is also a spender, we try to inculcate in him the value of money so that he can save more,” says Elizabeth.

 The financial coach says it is important to give children a sense of ownership.

“If for instance you are going out, instead of paying for all the food your children eat, why not split the cash and give each an equal amount of money and tell them that once they have exhausted it, there will be no addition and you will all head home.

Chances are they might share a meal to ensure they have some change,” Amos says.

Amos says budgeting should not be for the parents alone. It is important, he says, to teach children to plan ahead as well.

“When creating a family budget, it is important to bring the children on board in ensuring the family stays within the spending plan.

For instance, as a family, you can budget for a trip to the coast in June. If a child comes to you before the trip date and asks for a ball, ask them whether they prefer the ball to the trip.

Making a choice between the two will help them understand and practically learn how to budget,” says the financial coach.