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Money Matters – How to teach money management from a young age?

Money Matters - How to teach money management from a young age? - islamictribune.org

Written by: Mahnoor Arif

Talk about having only basic sums to solve like, ‘Ahmad had x amount of money, he gave y to Hassan, …’ and most of the time working on impractical Math being taught with little or no relevance to how it will impact us later on in life. And then growing up to find absolutely no inclination towards Money Management, Accounting, and Taxation in our so-called Professional Education Curriculum. Top it off with an eastern cultural mindset, a typical home in Pakistan (my country), where children are always dealt as children. Even when they are 20+ years of age, they kept miles away from the money related decisions at home. All of this combines makes up an individual struggle with managing money in adulthood. It will be expected from him to act all mature all of a sudden, which he will obviously find it difficult to cope with.

In order to avoid all of this, like many other neglected subjects or dare I say it, ‘basic life skills’, parents need to inculcate the sense of finances in earlier ages. Some homes are an exception to the norm, where children are brought up confident about such important matters. These children grow up to be strong individuals and stand as a pillar with their family in case of any financial emergency.

Along these lines, these are some of the points that will be helpful inculcating a healthy approach in children, towards money and finances.

The Right Age

Consider it your responsibility towards your child to teach them about basic life skills. As a future member of this society where his/her contribution will matter a lot. This comes with the acceptance that parents/elders need to have in their mind, that a kid should be given responsibility and credibility as they grow in their mental capabilities. And once they reach an age of understanding, they shouldn’t be brushed aside as a child. With the right kind of balance between love and responsibility in parenting, children can be brought up to be responsible citizens of this society be it linked to finances or other responsibilities that they need to take up. This study indicates that the right age to emphasize money-related decisions in children is when they grow up to be 6 to 7 years old.

‘It is worth emphasizing that 6- to 7-year-old children already often have their own money and learn to make their own decisions about spending and saving money (Kupisiewicz 2004).’ [1]

Giving Responsibility and Ownership

Give them control of money from the very beginning, gradually. When someone gifts them with money, you can do two things. Either keep it separate for them and tell them this is yours and we will use it to buy something you need. Or give it to them and then monitor how do they spend it. One can also introduce the concept of pocket money and monitoring its use if it’s affordable according to one’s family dynamics.

Saving and Management

Another excellent thing one can do is, open a separate bank account in their name and keep depositing money there. It can be gifted to them when they reach the age of 18. Meanwhile, during this time, whatever money they get, educate them on how to manage it. For example spending on necessities, recreational activities, and saving. It will inculcate a strong sense of responsibility in them from an earlier age and motivate them to save more when they will see the practical aspect of it. This study tells us how saving in the age of adolescence is linked to saving in adulthood. It says ‘…the findings suggest that saving at age 16 is linked to saving at age 34, and that socialization experiences during adolescence, as well as own social status and income, shape the savers that we become.’[2]

Involve the kids in money related play with the kids of their own age preferably friends or cousins. This will make learning fun for them. Arrange group activities for them, a combined family gathering for adults where young kids manage a mini gathering of their own. Engage them in such activities which give them an entrepreneurial kick!

A Real-Life Example

Have a look at this interesting story, where a teenager is now running a successful lemonade business. She started at 4 years of age and it is stocked in more than 500 stores in the US. [3]

Giving in Charity

Teach the kids from an earlier age to be involved in giving charity/sadaqah. Tell them how this will increase their provisions and is a way to be grateful for what they have. Also, it is a form of worship, a way to please Allah. It can be anything from giving their toys in charity or some money from their savings. Giving something from our belongings will never decrease them, in fact, it will put more barakah in them.

Prophet (saw) said: “Allah says: ‘O son of Adam! Take time out to constantly worship me; I will fill your chest with richness and remove your poverty. And if you do not do so, I will make your hands filled with occupation, and will not remove your poverty.’” (Tirmidhi)


[1] Trzcińska, A., Sekścińska, K. & Maison, D. The role of self-control and regulatory foci in money-saving behaviours among children. Curr Psychol (2018).

[2] Ashby, J. S., Schoon, I., & Webley, P. (2011). Save now, save later? Linkages between saving behavior in adolescence and adulthood. European Psychologist, 16(3), 227–237.

[3] BBC News: The 13-year-old who built a best-selling lemonade brand

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