I am going to share how you can educate kids on money smart habits. What? Aboi teaching me? Sibo? Pretty common sense after you read it all actually. Anyway back to the topic, I am not a parent to any kids so why bother to write this? Roughly two weeks ago, I found out that more than 50% of bankrupts in our country are ages less than 30. Sad? Not really. Surprising? Yes. Bother about it? Most probably no, we read newspaper for fun because people are kaypo (busy body). We like to watch dramas because our life is not interesting, look at accidents & hog the road especially Malaysians, ask people How R U? but never ask How Am I. Point being picking on other stuffs comes in our mind first but have you ever thought deeply of one of the most important skill in life which is to master your money.
Where do most of us learn money from? Very subjective I know, it could be from friends, the idiot box called tv, our own mistakes but not from teachers certainly. Teachers don't teach us money in school and certainly knowledge does not create wealth. It compliments wealth. If knowledge creates wealth, all the teachers, lecturers and professors in the world would be very rich but the truth is they are....I din say anything ah. The first place kids learn about money is from their parents unless you are an orphan lor.
I will confess that I did not learn that from my parents nor from my family, I actually grew from making my own mistakes, also from reading which is why I say that it is important, lucky enough to have friends who are like minded (it is hard to do it yourself in life) & lucky enough that I realised it before I grow old and senile like Mahathir. Lastly from hearing stories from people because I am kaypo and a true Malaysian. So what are the things that parents commonly tell their kids about money that the parents think they know "so well or act like a pro"?
Money is the root of all evil. What the heck! I don't know where some parents get this idea from, money in fact is just an object which is neutral. What you do to earn that money makes it good or evil. Never tell your kids this.
Money does not grow on trees. True but there's another meaning to it, that money is very hard to earn. I would rephrase it to money does grow on trees with the correct soil & some watering. Money is attainable by working hard on the right strategy & focus. I will explain this more later.
Money does not buy happiness. I can say that without money you would probably be unhappy in this world we are living now. It might not buy 100% happiness but it certainly does buy a lot of it. Don't give kids such negative perceptions about money.
What's the use of making so much $$ but you can't take it when you die. My brain was like !!!!!!?????? Another jackass statement. Then why are you working in the first place? You are going to die right in the end. Seen Chinese folks burn paper money to the afterlife? Just joking on that portion.
Sometimes the actions that parents take also indirectly inject money thoughts into their kids. In such a rapidly changing world, parents especially those husband and wife who both are working full time jobs, spend less and less time with their kids. Instead they put that idiot box called tv for them. It's quite OK if they are watching cartoons but a normal TV channel has many ads. What do ads constantly stream to our kids? Spend, spend and spend right. So better to buy more pirated DVDs hor, luckily we are blessed with that in this country.
Not only by exposing them to those ads about spending, many parents actually reinforce their child's beliefs on spending by buying stuffs for them. Mum I want that toy, buy for me now! You buy ma because you feel guilty that you did not spend enough time by substituting it with money. You succumb to that pressure from your child. In addition, when you actually have the time you take your child and go to a shopping mall during weekends where you show even more the power of $$$ by spend, spend and spend. Got the entire picture now? Heard of Buddha's teaching? The teaching of Buddha – one sentence in 12 years of education in primary and secondary school.
What is desire? What is greed? They are simply “wanting”. Want more, more and more, MORE and MORE! MORE AND MORE!!! like CHIPSMORE
Want bicycle, want motorcycle, want Proton, want BMW, want Ferrari, want sailboat, want private plane, want rocket …
DESIRE = never ending of wanting. That causes spending and more spending that is also never ending.
Apply that teaching in your money habits & think carefully on how you really want to educate your children. Do you want them to be part of that 50% that goes bankrupt or on the way to become one before they even reach the age of 30? So how can we help children develop good financial habits? I really don't know at what age they can start because I am not a parent, maybe you can advise me but...these are a few ways.
Piggy bank the old school style. Nothing beats this by inculcating the idea of saving some money. Tell them to save for a goal, give them a target or a reward for saving. People don't just save for the sake of saving. Imagine this, if a child is able to save RM8 per week starting at age 5 investing in something that gives 10% returns per annum, he/she will get RM500,000 at the age of 55 with just a total savings of RM20,000 for 50 years. Starting it as young as possible maximises the power of compound interest.
Ask them to use a cash book to track spending. Need not to be elaborate or detail, just simply how much money in and money out. You, as a responsible parents must check on the cash book from time to time. The accuracy of the accounts is not important, what is, is that they develop the habit of tracking.
Teach budgeting. Teach them that budgeting is not a seen as a type of restriction, self sacrifice or not to spend but merely delay gratification. Having said that, give them allowance by month not week. Stimulate real world case where you actually get your paycheck once per month which is the usual scenario.
If you have time, play monopoly instead of going to a shopping mall. Monopoly is a good game where kids at a young age learn to make financial decisions. From there they will learn about borrowing, mortgaging, paying expenses, fines & earning income. This game also opens their mind into making multiple choice decisions rather than binary which is BUY or NO BUY like most of adults do when doing shopping. They don't look at alternatives first, they buy and regret later.
Don't buy things immediately for them. If they want something use the ringgit for ringgit strategy. Want a toy that cost RM50? You save RM25 and I will fork out the other RM25. In that way, they save for a reason, a goal or target which they can reward themselves later. Make kids work for it because in the real world this is the truth. Don't buffer them, in fact expose them when they are young like a sponge, still able to absorb concepts easily. If they end up not knowing this young, that shift in adulthood will be very hard. And guess what, they will overspend, incur debts and higher likelihood to go into financial problems or worst bankruptcy. That time you don't even want to recognise him/her as your own child. It happens.
The other crucial thing which I myself believe is true, at least for me it is that money does grow on trees with proper soil & watering. Kids really need to know that job is not the only answer in this modern, fast changing world. Long gone is the word "loyalty" to a company, it is now "performance". Performance simply means working harder and harder. Contrary to many people who think that a job is safe, I find that having just a job is actually more risky if you have no other source of income. Consider this, my overall plan in paying the house comes from 4 sources of income.
Profit sharing from two online boutique RM500 each. First RM1000/mth my mum and sis will take it, each following RM1, RM0.50 is mine. I don't do the actual job of parceling & postage, I just market them, improve site, put ads or postings online and that's all. It takes me about 4-6 hours each week just to do that. When it goes big enough (site traffic), there's no need to do anything anymore.
Every child is in fact creative, don't skew their thoughts with your own idealism. Their era is no longer the same as yours when you were brought up. Kids should really not suffer because of their upbringing by parents. Many times I feel quite helpless to people that I know who care less about their finances because it is hard to change someone's mindset when they are an adult so sharing to adults in hope that their kids will benefit is at least in my ability :)
So good luck and have fun raising kids! If they become wealthy, ask them to come treat unco boi when they grow up. I want buffet style ok not Char Koay Teow.
Related Posts:
Getting Your Finances Straight
Everyone Must Be A Millionaire
Where do most of us learn money from? Very subjective I know, it could be from friends, the idiot box called tv, our own mistakes but not from teachers certainly. Teachers don't teach us money in school and certainly knowledge does not create wealth. It compliments wealth. If knowledge creates wealth, all the teachers, lecturers and professors in the world would be very rich but the truth is they are....I din say anything ah. The first place kids learn about money is from their parents unless you are an orphan lor.
I will confess that I did not learn that from my parents nor from my family, I actually grew from making my own mistakes, also from reading which is why I say that it is important, lucky enough to have friends who are like minded (it is hard to do it yourself in life) & lucky enough that I realised it before I grow old and senile like Mahathir. Lastly from hearing stories from people because I am kaypo and a true Malaysian. So what are the things that parents commonly tell their kids about money that the parents think they know "so well or act like a pro"?
Money is the root of all evil. What the heck! I don't know where some parents get this idea from, money in fact is just an object which is neutral. What you do to earn that money makes it good or evil. Never tell your kids this.
Money does not grow on trees. True but there's another meaning to it, that money is very hard to earn. I would rephrase it to money does grow on trees with the correct soil & some watering. Money is attainable by working hard on the right strategy & focus. I will explain this more later.
Money does not buy happiness. I can say that without money you would probably be unhappy in this world we are living now. It might not buy 100% happiness but it certainly does buy a lot of it. Don't give kids such negative perceptions about money.
What's the use of making so much $$ but you can't take it when you die. My brain was like !!!!!!?????? Another jackass statement. Then why are you working in the first place? You are going to die right in the end. Seen Chinese folks burn paper money to the afterlife? Just joking on that portion.
Sometimes the actions that parents take also indirectly inject money thoughts into their kids. In such a rapidly changing world, parents especially those husband and wife who both are working full time jobs, spend less and less time with their kids. Instead they put that idiot box called tv for them. It's quite OK if they are watching cartoons but a normal TV channel has many ads. What do ads constantly stream to our kids? Spend, spend and spend right. So better to buy more pirated DVDs hor, luckily we are blessed with that in this country.
 | |
| Spend_Spend_Spend: A Story from Riches to Rags |
人类不快乐，因为欲望/贪婪。
Manusia sengsara kerana nafsu.
Human suffer because of desire/greed.
What is desire? What is greed? They are simply “wanting”. Want more, more and more, MORE and MORE! MORE AND MORE!!! like CHIPSMORE
Want bicycle, want motorcycle, want Proton, want BMW, want Ferrari, want sailboat, want private plane, want rocket …
DESIRE = never ending of wanting. That causes spending and more spending that is also never ending.
Apply that teaching in your money habits & think carefully on how you really want to educate your children. Do you want them to be part of that 50% that goes bankrupt or on the way to become one before they even reach the age of 30? So how can we help children develop good financial habits? I really don't know at what age they can start because I am not a parent, maybe you can advise me but...these are a few ways.
Piggy bank the old school style. Nothing beats this by inculcating the idea of saving some money. Tell them to save for a goal, give them a target or a reward for saving. People don't just save for the sake of saving. Imagine this, if a child is able to save RM8 per week starting at age 5 investing in something that gives 10% returns per annum, he/she will get RM500,000 at the age of 55 with just a total savings of RM20,000 for 50 years. Starting it as young as possible maximises the power of compound interest.
Ask them to use a cash book to track spending. Need not to be elaborate or detail, just simply how much money in and money out. You, as a responsible parents must check on the cash book from time to time. The accuracy of the accounts is not important, what is, is that they develop the habit of tracking.
Teach budgeting. Teach them that budgeting is not a seen as a type of restriction, self sacrifice or not to spend but merely delay gratification. Having said that, give them allowance by month not week. Stimulate real world case where you actually get your paycheck once per month which is the usual scenario.
If you have time, play monopoly instead of going to a shopping mall. Monopoly is a good game where kids at a young age learn to make financial decisions. From there they will learn about borrowing, mortgaging, paying expenses, fines & earning income. This game also opens their mind into making multiple choice decisions rather than binary which is BUY or NO BUY like most of adults do when doing shopping. They don't look at alternatives first, they buy and regret later.
Don't buy things immediately for them. If they want something use the ringgit for ringgit strategy. Want a toy that cost RM50? You save RM25 and I will fork out the other RM25. In that way, they save for a reason, a goal or target which they can reward themselves later. Make kids work for it because in the real world this is the truth. Don't buffer them, in fact expose them when they are young like a sponge, still able to absorb concepts easily. If they end up not knowing this young, that shift in adulthood will be very hard. And guess what, they will overspend, incur debts and higher likelihood to go into financial problems or worst bankruptcy. That time you don't even want to recognise him/her as your own child. It happens.
 |
| Should they have a lit candle? Daredevils, eh? |
Profit sharing from two online boutique RM500 each. First RM1000/mth my mum and sis will take it, each following RM1, RM0.50 is mine. I don't do the actual job of parceling & postage, I just market them, improve site, put ads or postings online and that's all. It takes me about 4-6 hours each week just to do that. When it goes big enough (site traffic), there's no need to do anything anymore.
http://www.shoeshaven89.blogspot.com/
Rental income from old house RM750. Again do nothing except collect rental.
Salary only RM750. If I lose my job, I'm not so pressured because I have different sources of income. Can you achieve that? Of course, first by throwing away your job mentality & the work hard thinking. Kids need to know this. You should try to avoid negative influences and information to your kids as much as you can.
Every child is in fact creative, don't skew their thoughts with your own idealism. Their era is no longer the same as yours when you were brought up. Kids should really not suffer because of their upbringing by parents. Many times I feel quite helpless to people that I know who care less about their finances because it is hard to change someone's mindset when they are an adult so sharing to adults in hope that their kids will benefit is at least in my ability :)
So good luck and have fun raising kids! If they become wealthy, ask them to come treat unco boi when they grow up. I want buffet style ok not Char Koay Teow.
Related Posts:
Getting Your Finances Straight
Everyone Must Be A Millionaire
1 comment:
I cannot agree more with you Nick. After reading rich dad poor dad, i wish i had a rich dad to teach me on the subject of money too. He is way past retirement age now and still working as hard as ever because his income stops if he stops working. I also regret not discovering value investment and money management earlier in life. Thus I am adamant to be a Rich Mum to my child. I just hope it's not too late for me.
Post a Comment