Thursday, April 23, 2009

The value of money

Just the other day, Andre asked me, "Mummy, do you know what I want to be when I grow up?" "What?" "A millionaire."

My friend Eunice previously blogged about the importance of teaching our kids to manage money. I couldn't agree more. In our relatively affluent world, many kids these days have no awareness of how to manage money. Most of the time, the reason is simple: they have too much of it.

When Lesley-Anne was in p1, she packed food for recess, so we gave her a token 50cts a day. Since she hardly bought anything from the school canteen, it became more of a hassle than anything, trying to find the loose change and remembering to give it to her. After a while, we stopped bothering. But one day, when I casually mentioned this to a friend, she said, "If you don't give her money, she will never learn how to manage it."

The truth hit me like a ton of bricks. So from then on, pocket money to our kids was carefully calculated (not based on the going rate). We give our kids enough to buy a meal but they'll have to think about whether they want to spend the remaining amount on a drink (which I consider an extra since they bring water) or an extra snack or just to save it. But they won't be able to do all three. That's the principle of management - to plan what you want to do with the finite amount of resources you have. Too much or too little and there's no management involved.

Related to this is the value of money. I'm sure we've all read horror stories where kids chalk up atrocious bills on credit, spend beyond their means and expect their parents to bail them out. Even young adults spend like there's no tomorrow, without thought as to how they will pay off their debts.

And I will say this unequivocally, often it's the parents' fault. If you think, "oh, my kids will learn to manage money when they're older", think again. If they can't manage $2, they won't be able to manage $2,000. If you have always doled out money to feed your children's needs and wants, how would they have learnt to value money (or things for that matter)? It's not about whether you can afford it, whether you are rich or poor. It's about responsible parenting. It's about teaching your kids that money is a commodity that needs to be earned and should be used with thought.

Both Lesley-Anne and Andre have been trained to value money. If we enter a toy store, they know better than to badger me to buy something for them. My rule is that us parents will pay for necessities, extras come out of their own pockets except for the occasional treat that we initiate. Interestingly enough though, I've found that the value of money can differ from person to person simply based on differences in character. My sister and I were brought up the same way, but I'm much more careful with money, she's more liberal.

I'm seeing this trend with my kids - Lesley-Anne plans for the future, Andre lives for the moment. When I brought Andre to the bookstore, I told him I would only buy him one Beast Quest book, if he wanted more, he had to pay for them himself. Immediately, he said, "ok! I have $40. How many Beast Quest books can that buy?" I was a little miffed - somehow the point of valuing money is lost if he's so willing to part with it.

But then I thought about it and realised that it may not be such a bad thing. You see, Andre has a very generous spirit. Although he knows that money is valuable and cannot be wasted, he doesn't love money. If that sounds contradictory, it's not. The lesson here is that we need to value money, ie not treat it carelessly, but not love money, ie be consumed by it. Money is, at the end of the day, only the means to an end. The bible is full of verses which warn against the love of money, not because money in itself is evil but because the love of it can lead to many evil thoughts and deeds. Another friend once told me, "Saving money is not the same as hoarding money." Very perceptive.

In sociology, we learnt a simple truth: wealth is not defined by how much you have, but how little you want. The Nigerians are one of the poorest people in the world, but they are also the happiest.

"Whoever loves money never has money enough; whoever loves wealth is never satisfied with his income. This too is meaningless." - Ecclesiastes 5:10

So it's a volatile balance we need to achieve - value money but don't love it. Simple to understand, hard to execute. Now we just have to teach it to our kids.


Anonymous said...

Value money but dun love it, exactly my sentiment.

I started teaching my older gal when she was 4yo. I would gave her $1 after she helped to hang our clothes, clean our shoes. No rewards for doing chores for herself like making her own bed, folding her own clothes. She would then deposit the dollar coin in her piggy bank. When she started P1, she brought snack to sch for her recess but I still gave her a dollar a day, just in case she lost her snack box or dropped her food on the floor, she could still buy from the canteen. I got a small thin notebook for her and she would record her saving every day. Most of the time she save her pocket money. She never spend on soft drink or stationaries without our permission. At the end of the month, we would go to the bank & deposit her savings. She still does her recording but on a weekly basis now, usually on Friday nite, when she whine down for the week.

Now, they have this Mighty Saver account from OCBC, where the bank provides a card and a sheet of 20 stickers, for every dollar they save in their piggy bank, they can stick a sticker on the card, and when they deposit their saving in the bank with the card, they will receive a small gift. My younger gal loves doing this.

My gals can use their money to purchase birthday/christmas present for family & good friends. Every year before Christmas, they will withdraw $50 each from their account (my hb & me also chip in some). With the trolley basket, we will head to the supermarket to pick & choose food that are sutiable for old folks. Then, we drive to the old folks home that is under my dad's blk and donated the food. They enjoyed this yearly event.


Albert said...

Good article. Thank you very much for your sharing. I always told my daughter to value money and know it is useful, but don't be so chary. Her classmates and she like to study what meal are delicious and cheap, and like to compare to other school too because they often visit other school due to GEP activities. Last time, they request to have lunch at school first then go to ACS to take part in the IQ competition, because they know that meal is expensive at ACS.;) My daughter loves to win prize via her academic record and school activity. She also likes to mail her articles to try to publish. She is excited to get voucher or cheque from them. She just got some vouchers while she achieved top at neighborhood school. She was very happy to earn about S$200 voucher and cheque at Taonan. She feels so sad when she knew no much to be able to earn at RGPS. Her classmate is top at total results at school last year, but she cannot attend the meeting of award because of no prize for total results top. My daughter was lucky to achieve top at math. So she had a chance to appear at award stage. What results for her PSLE? We have to wait. :)

eunice said...

Managing $ is yet another controversial topic with parents.many parents believe that children shouldn't have to worry about $. I agree, they should know how to manage it. Which is different. They are never too young to start.

I try to teach Sean not only about the value of $ but also, to give when you can and not just love $ alone. I'm glad that he does know. Has a fund for stray dogs called "Poor dog in need".

I find it hard sometimes and many times don't know if I'm doing the right thing. I hope that Sean grows up with a healthy respect for $ but at the same time know when to give it away.

monlim said...

Giving is such a great way of teaching the real value of money. I applaud you ladies!

Puzzled by Puzzles! said...

"value money but don't love it." That's a good line! Reminds me of the 2 different characters (brothers) in Slumdog. One should never be a slave to money.

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