Tuesday, December 2, 2014

Parenting with Love - Money Management: Smart Money, Smart Kids

I have great role models from young on being independent and responsible with money. The 2 role models are my mum and my brother. My mum had it tough when I was younger as she had to raise the family on her own. My brother sat me down when I was about 15 or so, and basically said that since I have no plans over the holiday period, it would be wise for me to work during then and save the money as 'pocket' money for myself. That was how I started to work part time which during my adult years, led to me paying for University fees on my own.

Fast forward to some years later (ok, I fibbed - many years later :p) this is what happened recently...

"Daddy, can you give me $10? I would like to buy this keychain please?" Dumpling asked at a bookstore at the airport while we waited for our boarding time. That was not the first time the kiddo has asked for money from us and I knew then that I have to do something effective and fast.

Since a few months back, I noted that while Dumpling understands the monetary value of money, there is a true lack of understanding of the 'work value' that is pegged to money. Being the only grandchild on the hubs' side and our only child, this also means that she is very blessed as she had the chance to experience many things and was gifted with many toys and presents.

So I became increasingly worried about the careless way she handles and views money. I do not wish for her to become an 'entitlement' kid which I feel, would carry with her through to adulthood. To me, being careful with money is much more than just knowing not to bust the budget. Rather, it is about treasuring the opportunities / things that it brings, being responsible with it  and knowing to give, spend and save.

I came across the below title - Smart Money Smart Kids written by Dave Ramsey (father) and Rachel Cruze (daughter) and wow, was I blown away. To say that I was inspired is truly an understatement. I was looking for a book to teach Dumpling on money management but I learnt so much more in return.

Dave Ramsey was a bankrupt who worked, planned and learnt his way out of bankruptcy while Rachel (his second daughter) basically grew up during the days where they had nothing. In this very real recollection of their experience, memories and practical tips, I realised (to my horror!) that I, too, was also contributing to Dumpling's careless ways!

Take tithe for instance. How many of us, while attending church weekly and when it is time to tithe, we would just hand over money to the kiddos for them to place into the contribution bags / envelopes? I am guilty of that. Now, then how can I blame Dumpling for asking for money whenever we are at Daiso out at the retail shops as that's what I have been conditioning her for week after week, in church!

What about credit cards? Have you ever explained to your kids about how they work? We say that kids model our behaviour and as parents, we are ever 'oh-so-careful' with our language and choice of words in front of them. Have you ever thought of how the kids see us make purchases? All they see is us signing for them and that's it. They do not often see the physical bills being handed out and from there, learn how we manage the 'budget' or see the debited amount (if using NETs / debit card). Now, in the long run, are we not also conditioning them to purchases with credit cards?

That would be fine if they are taught how to manage the income and outflow but have we taught / shown or even explained this to them? The issue is, the kids can't see this part of the transaction so how do we aim to teach them to be responsible with money when this is a debt-based society? And I must add that, with all the credit card signing, I have overspent many times too! (That would be another post altogether.)

In the book, Rachel is the main author where she shared the various money handling tips and practical methods that she grew up with, how they were tasked with chores, given the freedom to make mistakes, worked on long term goals (each of the sibling saved for their own car!) and led debt free lives. Dave, on the other hand, would add on remarks in a commentary style on why he imposed those rules and his thoughts on them, as a parent and as a financial expert.

And with that, I have taken on the tips and suggestions and, Dumpling and I have been on a mission of a different kind for the past week plus (giving, spending and saving) which I will share in the next post. Stay tuned!

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