I SPEAK KID
By ELAINE DONG
I’m trying to instil some good money habits in my kids. It’s harder than I expected. Both of them have a coin pouch each, where they keep loose change their father and I give them occasionally. The idea is this will be their stash to spend. It hasn’t happened yet.
It seems they’re better money custodians than we are; they are loath to part with their coins every time I suggest they buy things with their own money. The standard replies have been, “I don’t want to use my own money,” and “why don’t you buy it for me?”
Once, I got my eldest to set up a lemonade and mooncake stall, thinking that if she earned the money herself, she would learn to manage it. The stall operated at a loss, mine. She took all the cash, all RM8 of it, and I was left to recoup the loss of two double-yolk, lotus paste mooncakes and about a dozen lemons to make two pitchers of lemonade.
Operation lemonade stand: Fail. But I got a lot of good pictures out of it!
This financial kick that I am on is a result of some financial management books I’ve been reading. There are also some books out there that teach you how to raise financially savvy kids, but I thought the best way to teach them is to be a good role model. How can I preach something I don’t practise?
According to these books, I need to set up several different accounts for the purpose of saving, investing and spending. I admit I am generalising a bit, because the books had more sophisticated names for each.
I think investing is called generating your net worth, and saving is something along the lines of emergency and buffer fund. And I did not make up the third one: Spending. There’s supposed to be balance in one’s life, therefore it would go against the laws of nature to save, save, save and never enjoy any fruits of your labour. It makes perfect sense.
So, I have this brilliant plan in my mind for my kids. I would give each of them three pouches, and start giving them a weekly allowance. From that allowance, they are to allocate a certain percentage into each pouch, for the purposes stated above. I presented this plan to them, imagining a scenario where they look at me in enthusiasm and a small degree of awe, and immediately jump on the bandwagon of the financial savvy train.
What really happened was this: My eldest narrowed her eyes suspiciously and asked me what I meant by allowance. Did it mean that she could do with the money as she pleased? I explained that she could spend part of that money but the rest had to be saved or invested.
What’s invested, she asked, eyes still narrowed. It means we have to put it somewhere so that it grows, I say.
How does money grow? You mean it grows bigger? Or like we grow a plant? she asked, confused now.
I had a smart alec remark on the tip of my tongue, something along the lines of money growing on trees and solving all our problems. But I decided to be mature.
It grows by becoming more. Say you put in RM5, and it becomes RM5.20 at the end of the month, I say sagely.
Oohhhhhh, she says, not really understanding at all.
My younger one, who has been listening to this enlightening exchange, asked if her pouches could be pink. Hearing this, her sister protested that she wanted pink pouches, too.
So from then on, the conversation deteriorated into the realm of the degree of pinkness of the pouches, and whether they should have zippers on them so that the coins don’t fall out.
I learnt one thing. You have to be prepared if you’re going to talk to the kids about money. I certainly wasn’t. I didn’t even think through the colour of the pouches, for goodness sake.
So, I’m going to withdraw and recoup with a well-thought out plan in the next few days. I will think of the answer to every possible question they might fire at me, and give them no avenue for outsmarting me or thwarting my big money plans.
If it really works out, I will share it with you here. They say having kids make you a better person. I truly believe that. For without kids, I would not now be trying to shake off bad money habits and take on some good ones, because I know the best way to teach them to handle money well is by doing it myself.
Read about Elaine’s daughters’ lemonade stand at http://tinyurl.com/angelolli-com-lemonade.