Personal Financial Management


Do young people know the ABCs of Money Management?

High school students are studying up on geography, chemistry and history, but most aren’t learning fundamental money lessons to help them financially navigate the real world.

Such is the case with John Mwaura (Not his real name), an 18-year-old who finished school in December 2013 from Murang’a High School in Murang’a County. Much to John’s chagrin, neither the school nor the education system requires students like him to take a personal finance class to graduate. “There is no personal finance requirement in the education system, which is just astonishing to me,” he says.

Like Mr. Mwaura, odds are our young people will finish high school without being taught basic money lessons, including how to create a budget or write a cheque and although the recession in 2008 has raised awareness about economic issues, it appears those heightened concerns have not prompted the Ministry of Education to incorporate personal financial classes as a requirement.

Interest is there, opportunity is not. An interest in personal finance among high school students doesn’t appear to be the issue. My own survey found that at least 84 percent of high school students desire more financial education. Many students said they would rather learn about money management in the classroom than make financial mistakes in the real world.

Parents have also expressed concerns over their children’s lack of financial knowledge. In my survey most parents with college-bound children are worried about their children’s ability to manage money. It’s been noted that many schools bring in guest speakers who may talk about the issue, but that it’s not enough. I mean one can’t learn a language in two hours, so having a two-hour visitor coming in to talk about money really doesn’t provide the students with what they need.

It’s been noted that state and county governments are so focused on teaching the core subjects of maths and English that personal finance often gets overlooked. If you can’t read and you can’t count, all bets are off. Maybe many cash-strapped county governments lack the funding to institute a personal-finance class/course.

Personal financial management is very important in assisting our young people achieve their goals and be successful in the world. I believe that if we can inform our youth on how to manage their finances, however much or little they have, it will go a long way in improving their lives. We need to ask hard questions like how do we spend our money? Why do we need a few bank accounts? Why do we need insurance? How do we invest? How does the financial system work? Details about taxation? How does the stock market work and how can I make money out of it?

The questions are many but they need to be answered. Truth is we all need more advice and guidance in personal finance and it should not be a luxury for the rich and the middle class. Financial plans such as retirement plans, savings plans, investment plans, Holiday/Spending plans, Insurance plans, Medical plans should be in your mind as you start working or doing business. It’s never too early to start these things and once you understand them and start working towards putting them in place then you are well on your way to achieving financial success.

In conclusion, personal finance management is a lifelong journey and if one wants to achieve their dreams and gain success then they should always seek information, from peers, parents, relatives, friends, work colleagues, the internet and a financial advisor. It is not a difficult thing to understand, it just requires a bit of attention, focus and action.

Let me leave you with a few tips on how to manage your finances.

  1. Make a Budget
  2. Make Smart Investments
  3. Build your Savings

For more details on these tips, follow the link below:

Money and savings - personal financial management
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Article by Mr. Alex Ndegwa, an ICT officer at the Kenya Medical Research Institute (KEMRI).

(I am travelling, thus this guest post was scheduled before today to bring Work Wednesday to a close. Truth be told, Alex has more than a point. I am yet to apply for any retirement, insurance, medical or similar plan because I am not even sure about them mostly because I thought they were a preserve of a certain category of employees. Thankfully, the government has taken upon itself to sensitize us on plans like NSSF and NHIF and thus I will do so soon. If I was taken through this earlier, I probably would have done so already. What do you think?)


2 thoughts on “Personal Financial Management

  1. ” I mean one can’t learn a language in two hours, so having a two-hour visitor coming in to talk about money really doesn’t provide the students with what they need.”

    I agree with that line completely, which why parents should take on the heavier side of this burden. And why not? Where do the kids get their pocket money from? Who do they live with day to day that they observe plan, budget and spend? Who tells them what they can’t have ’cause it costs too much? If you are a parent, your kids are already watching, listening and observing. Just take a few minutes every now and then to tell them how you do it. Teach them what you already know. They will learn better and retain more from their own parents than they every will listening to a speaker for 2 hours. They will have a practical understanding, not just book knowledge.

    If you are a parent and you’re afraid you’re kids will see you mess up, just swallow that pride and let them see you mess up. But also let them see you pick up the pieces, get moving and thriving again. They will never forget the lessons they learn from that experience.

    Just my thoughts (^_^)

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