Our culture is very different when it comes to money. We overprotect our kids. We do not speak freely about money with our kids and we keep deciding on their money requirements till they are teenagers and sometimes till their early twenties. Kids have no idea, how much education costs? What is the right pocket money? What is monthly budget? We act like “always bailing” kind of bankers to our kids.
This week I had 2 interaction on the money with my daughter who is 10 years old. Her school had arranged for a 2 day outstation educational tour to Agra and they were asked to deposit Rs 3200/- as expenses. She was excited that her entire class will accompany her and it will be her first outstation trip alone. We gave her the money and next day when she came back, she was a bit sad and angry.
Out of 50 students, only 27 deposited the money. Many did not because some parent could not afford the money as they were already paying heavy fees and transportation expenses. But, my daughter could not understand – affordability. She said it would be a good trip, a learning experience and loads of fun, still parents did not “allow”. She could not believe as she could not understand terms like budget, expenses, and savings.
The second event was, she insisted on having a burger at McDonalds. So we took her to one on the drive-in outlet and she was fascinated to see the staff. She was attentively watching how one of them took the order, took the money and passed the bill to the kitchen guy. He called what we require, packed our order in the envelope accompanied by the extras like straw, tissues etc. She immediately asked “ can I work in Mc Donalds one day? I really want to work here”. I said- Why not? In fact, you can work part time during your college and earn pocket money. She was happy but I wondered- my response was not ideally Indian. Maybe in western countries this happens, that kids work in restaurants during breaks, help parents accumulate the college fund- But is this possible here?
I mean everyone working for McDonalds in our country is working for a living and not pocket money expenses. And above all, how many of us like our kids to be restaurant waiters? Culture problem again.
We do not have that culture of carefree conversation about money with our kids. We assume education, marriage and settling them is our job- because our parents too did the same for us- right? Don’t you think we need to change here? We are just creating hi-intensity clones of ourselves. It’s time we engage in some meaningful talk with our kids about money.
Here are a few things I would like to try talking to my daughter:
–Salary is not our budget: I get to do whatever I want! Ok, maybe not at the exact moment that I want to do it, but yes anything I want to do or buy, I just save for and then do it! For example, I’ve finally started saving up and traveling with you! This is because I save a part of my income around 50% and invest it so that I can become worry-free for my needs.
–I sleep better at night. Do you know the feeling you get the night before you have a big test or exam that you know you didn’t study for? That’s sort of what it feels like to be in debt and owe people money. You know you’ve screwed up and there’s nothing you can do but face the music, but the stress and anxiety still keep you tossing and turning all night. Yes, that can happen every single day when you are in debt – but it doesn’t happen when you have money in the bank.
-On top of that, I save for the big important goals too (like retirement). Your goals could be different when you graduate and start working more. Maybe you’ll want to buy a car or a house! Just know that it’s within your power to save and do that.
–I am not your banker, who is waiting for an opportunity to fund your education or marriage. Maybe for the education I can help out or can get your loan from a real bank, but for marriage, I will not help. Earn and fund your wedding and future requirements like a car or i-phone etc.
– When you do decide to spend money…and you’re totally allowed to do that! But can I give you just one piece of advice? Don’t buy something just because you think you should have it; that means certain brand names, trendy items or anything else your friends all seem to have. Buy things because you truly need/want them. It’s ok to want new clothes, from time-to-time – but buy stuff you actually feel good wearing, not just stuff that all your friends have. It’s also ok to want some new books or games or music or whatever other hobbies you have – just make sure it’s within your budget and that it’s something you’re actually going to use.
– Debt is something you will probably have to deal with at least a few times in your life, whether it’s from borrowing money from the government to go to college/university (student loans) or borrowing money from a bank to buy a house. You will also have to learn how to use your credit cards properly, so you don’t ever end up in credit card debt (which is the worst debt of all). But borrowing money isn’t the end of the world, as long as you borrow as little as possible and have a plan to pay it off.
–Saving money has given me the freedom to design the life I want. When I was still in debt, I needed every single paycheque I got from my job. If I’d missed even one, for some reason, I wouldn’t have been able to pay my rent, bills or debts. It also made me feel like I couldn’t leave my job for a new one that could’ve been more exciting or challenging because I couldn’t risk having the new job not work out. I needed the money I was earning – so I was stuck. Since being debt-free and building up some savings, I recently quit and became my own boss, which comes with all kinds of risks… and could come with a lot of stress… but I know I have money in the bank, to help if things get tough.
– And finally, Money is something we all deal with every day, and will use for the rest of our lives! Like any other subject you’re learning in school, we all have to start with basic principles of how to manage our money. So, don’t be scared to ask questions! Talk about it more – talk about it with anyone who will listen – and just try to learn as much as you can. I’m constantly learning new things and changing my strategies, so I can try to live the best life I can with the money I have; that’s all my dad wanted for me – and that’s all I want for you. 🙂
I think I have written a lot as wrote from my heart… But really I want to see things changing when it come to money with my kids. Hope I can do it. Share your thoughts as each point may be an eye-opener for all of us.
Dhawal Sharma says
This is one of the best article I read on your blog ; a big thumbs up for this one 🙂
Keep up the good work bro..
Madhupam Krishna says
Thanx Dhawal…Overwhelmed with your words… 😀
Rajat Monga says
Hi,
Really amazing article.
I am prospective investor and was looking for some radical investment options.