Introducing budgeting to pre-tertiary students


Once again, most pupils and students in pre-tertiary schools are beginning another academic year. There is an ongoing debate about the content of curricula these children will be trained in.  It is expected that education will help these children become knowledgeable and skilled enough to succeed in their future roles as adults.

Financial literacy is usually given minimal attention as part of the basic education process. The authorities definitely need to consider this as a key topic for children. However, parents and guardians must also play their roles to help in the proper development of these future leaders.

So, where can we start?

Let us begin with budgeting or financial planning.

“Failing to plan is planning to fail.” This is a popular quote used when discussing plans. The statement is often attributed to Benjamin Franklin or Winston Churchill – two of the greatest leaders in western history who understood the importance of strategy and success.

When it comes to money matters, budgets are synonymous to plans.

A budget can be defined as a plan for saving and spending. It shows the amount of money you earn and the money you spend over a period of time. Budgets are not meant for only adults. Kids can also be trained to budget, and should actually be trained at a young age.

The following are some reasons you should teach budgeting to kids.

  • It is a tool used to manage money. Kids must be taught to handle this tool well, as part of their development into responsible adults.
  • It helps you know what you can afford. How much you have available usually affects your purchasing decisions.
  • It is an important habit to learn early in life.
  • It helps children understand the basic economic principle of scarcity. That is, resources are limited.
  • It helps in making right decisions based on available information. A child can rely on a budget to avoid unnecessary expenses.
  • It helps when saving toward something.
  • Children who learn to budget are unlikely to be drowned by debt as adults.
  • A budget can show children how they can manage pocket money beyond sweets, so they can afford their dream toys (for example).
  • A budget can help children understand that if they earn more or spend less, they can reach their savings goal faster. Doing the opposite makes it difficult to meet savings goals.
  • Children who discuss money with family usually handle money better when they grow up.
  • The confidence of children on the subject of money grows, and their financial skills are better developed if they are taught to make financial plans early in life.
  • Children who do well with money often have parents and guardians who discuss and train them on money, savings and financial skills from an early age.

So what goes into a budget?

A simple budget consists of something like this:

  1. State the amount you have.
  2. Add the amount you expect to earn or receive over a period.
  3. Next, subtract the amount you expect to spend or share.

Ideally, this should result in a positive figure. If your total earnings are higher than your total expenses, you must have surplus funds.

More details can be included in the budget. This can be discussed later.

Despite the simple nature of budgets and their usefulness, most people do not work with them when dealing with their finances. This is why so many people are covered with debt they struggle to get out of.

I will end here for now, but hope to treat the topic more thoroughly another time.

So, try to start budgeting with your kids. Remember, financial literacy at a young age has various benefits for children and society.

The writer is a financial inclusion advocate with years of customer-facing experience in offering financial services.

Leave a Reply