I grew up in a middle-class income family. Money was certainly not something my mother would coin as easy. If there’s anything I remember about money as a child, it would be her favourite phrase – “You think money grow on trees ah??” in a typical Asian mum fashion.
With two working parents, we had enough growing up. It wasn’t luxurious, but we weren’t entirely deprived either. There were enough to eat, we had a decent roof over our heads and the privilege of going to school. There were occasions where my parents gave in when I relentlessly wanted something, but more often than not – it’s a no. And I’ll hear that same phrase again – “You think money grow on trees ah??”
Alright. Point taken. I can’t help but to imagine how nice it would be if money does grow on trees. We’ll never have to worry about money again.
Now that I’m older, a little bit wiser and earning my own money (hashtag adulting), it’s hard to miss her point.
Precisely because I grew up in this ordinary setting, my parents were strict with money. Saving was the number one virtue my mother would remind my sister and I. If I have to nominate the most prudent person I know when it comes to money, it would be my mother. Or maybe yours too, if she’s like mine.
Well…yes and no. I would advocate investing, on top of merely saving. Saving is good, but stopping at just saving is not enough especially in today’s economy. However, with that said, it is imperative to save as the first step to financial freedom. Without any savings, you won’t have anything to invest, and much less to build your wealth. If there’s a piece of advice I would give to my younger self, it would be that.
Now, in my late twenties – I wished I had started sooner. As a child I learnt that money doesn’t grow on trees, which is true. However what I didn’t knew was, money can grow – but just not on trees. It grows through making it work for you, instead of you merely working for it.
Now, these are perfectly reasonable questions to ask. It’s important to understand why you’ve gone or planning to go beyond saving. So if your child ask you how do you make your money, do not shy away from the question. It could potentially turn into a valuable life lesson for them.
I remembered this distinctively. My parents told me:
“Money is not easy to earn, so don’t waste and simply buy things”.
It’s true to an extent, no doubt. But it has also set up a limiting mindset in me about money before this.
So how does this translate to teaching our young ones and transforming their mindset to think BIG?
Some people argue that kids are too young to know about money, and the financial concepts might be too complicated for them to grasp. This misconception has been addressed by Beth Kobliner, the author of the New York Times bestseller Get a Financial Life.
She explained that children as young as three years old could understand concepts like saving and spending. We tend to underestimate the learning capability of kids these days. Their developing minds are just like sponges; they have the capacity to learn fast and internalize knowledge quickly as long as the parents are willing to share with them.
Kobliner also emphasized that the sooner parents start taking advantage of day-to-day opportunities to teach their children about money, the better off the kids are in the future. Kids are heavily influenced by their parents in cultivating any habits, including finance.
It would serve the children best to note that professionals do suggest to take the approach of a gradual introduction of financial concepts. This includes saving and spending, investing and debt as they grow up to different stages in life.
If you’re teaching your teenager about how money can grow by compounding interest, bring it out of the context of percentages and mathematics. Use this valuable opportunity to teach them about money and investment, as young as they are.
Coming from an ex-school teacher (a.k.a myself – having taught in several schools in Australia, Singapore, Japan and Malaysia), schools these days fail at teaching students about personal finance. They teach numbers. They teach you to count. And they teach you formulas – but numbers are just numbers until you give these children the meaning of it.
Money is a subject that should be nurtured from young. As adults, if we’ve missed the boat when we’re young, it’s okay. We learn it now, but we want our young ones to be as informed and prepared as early as they can.
Then, perhaps we could have seen less millennials committing money mistakes and less credit card/loan defaulters in the country. Instead of having AKPK Malaysia teach our children in managing their finances when it’s too late, let’s do it as parents when it’s still early. For the uninitiated, AKPK is the Credit Counselling and Debt Management Agency. If you have to meet them, you know you’re in pretty bad financial shape.
Now, this raises the question of whether do we really want our children to go down this route and suffer the consequences of inadequate financial literacy?
The good news is, they don’t have to.
A lot of these mistakes can be prevented just by introducing early financial education so they would make wiser decisions with their money. Help them understand that wealth comes to those with the right mindset and habits. Plant the right seed, and in season, reap the fruits of tomorrow. Managing their finances well and watching their money grow should eventually be their goal as they grow up. And like all good things in life, time and patience is key. And what better time would it be, if not now.
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