Our Financial Schizophrenia - Rescuing the Next Generation

Has it ever occurred to you that part of the reason we manage money poorly in our young adulthood (and often way after) is due to how the relationship we had with money growing up? Let me illustrate:

For most of us in Africa, money was a commodity that was either there, or (most of the time) wasn’t. There was never a sense of proportion with money, in the sense of earning it, spending it and saving it. When we required something, such as unusual school supplies, the way many of our parents or guardians responded was by either sighing about how they didn’t have any money, or the request suddenly materialising. Sometimes, even, this would be the result of a precious family asset being liquidated, such as a prized piece of livestock quietly being sold off to pay for, say, exam fees. Even in middle class families, more often than not children would be told there was no money for various requests (often with a pained look that suggested unreasonableness at the mere fact of the request), and then a sudden materialisation of that request. Ask for a bicycle, and you’d be told it cannot be afforded, and then you suddenly saw the bicycle at your birthday or at Christmas.

The only time Kenyan (and I suspect African) children handled their own money was when they received pocket money for boarding school, or lunch and busfare in day school. Even then, it was doled out in such exact quantities as to actually endanger you were there to be a price increase or an unexpected need for extra cash.

This schizophrenia was understandable (our parents were living through tough times, and funds were indeed tight), but it has led to a damaged relationship with money for many in our generation. We do not know how to earn, we do not know how to spend, and we do not know how to save. We go through boom and bust with our money. Watch what happens in every city, town, bar and tavern in Africa in the weekend after payday. Look, even, at what happens in churches and mosques. Cars are brought out of garages, fuelled and driven around. We (at least in pre-Corona days) go out, eat and drink and invite our friends to ‘chop’ our money. We give generously to church and mosque. Even beggars are not left out of the good times. But barely two weeks later, we have run out of money. From eating steak, we are down to greens and ugali (while consoling ourselves that it is healthier). We move from driving to work, to mathrees, to walking when the weather is good - all in the span of sixteen days every month. 

We do not know how to budget and even when we do, we find it difficult to stick to these budgets. We are quick to borrow without a solid plan on how to repay, even when we become liquid again. We all know the bitter bitter old joke: I had better not see you getting fat when you have my money. 

If this reality sounds familiar, then, what are we to do? I don’t know about our generation, but perhaps we need to work on the next one - our children - and begin to make them comfortable with money. How? What I am about to propose will be opposed by some (‘it is unAfrican!’ ‘This is not how we do things!’ ‘We are spoiling them!’). Haidhuru, let’s plough on:

1. We need to start giving our children small allowances against the work that they do. Of course they should do their ordinary schoolwork and chores with no monetary reward, but there are always extras that they can do and get paid for. Is it slashing grass in the compound? Is it shamba - farm - work (that you would pay a casual worker for)? Is it washing the car? When they do exceptionally well at school (even moving from getting 30% in Biology to 70%), give them a small reward. The amount doesn’t matter, but it should not be trivial. It should be substantive enough for it to be an incentive.
2. This money should be theirs, and should not replace any other money which you would give them as a matter of your parental/ guardianship responsibility. For example, if you give them busfare to school, these wages should not replace it. This is their money, which they are free to spend as they wish (within legal and familial strictures, obviously). Thus if you are speaking about six year olds who want to spend their money on Kinder Joy, let them at it. If you are speaking about a teenager who wants to buy ugly sneakers, that is their problem. 
3. Suggest savings ideas, and even help them if they need to open a savings account or even just buy or build a piggy bank. But GET OUT OF THEIR WAY. If they choose to not follow your advice, that is their business. And if they, because they trust you, give you their wages to keep for them, please do NOT spend these. Do not repurpose their money (‘Do you know how much school fees was last term? Thanks for helping me pay’. DON’T). And also, you are not KRA - do not ‘tax’ their money - pay them in full.
4. If they come to you with non-essential requests - money for going out with friends, money for airtime and such, have them use their earned money. They should learn to pay for their little luxuries. However, if they have requests for unusually large items - a bicycle for their birthday or Christmas, a phone, a laptop - split the costs with them. Make them a deal - raise X amount, and I will top up. And when the time comes, bar disaster, make sure you come through. But if they do not raise their proportion, do not be tempted (or feel ‘woiye’) to make up the difference. Let them learn the discipline of saving this way.

Of course, in these corona times, things are tight and becoming tighter, so it may sound odd to even be discussing money in this manner. But I would argue that inculcating a healthy relationship with money for our youngsters may be more important now than ever. In the next decades, they (and the nation) will thank us.