Money lessons - teaching my kids about money

For the first time, I took Brendan to the ATM. That was sometime last month, to deposit his money, of which, half of it was collected from his school under the govt incentive for school children. 

I do not give my kids pocket money to school most of the time as they prefer to bring food from home. They are times when I'd give them some money to buy things from school so they can have the feel of having money in their hands and be in control of the things that they buy.

Brendan is a very cost-saving boy. He is careful in spending unnecessarily. He used to pester me to bring him to the bank to bank in his money, even if it's just a few ringgit. I've since set a rule that if he needs to bank in money into his savings account, he will have to wait til he has at least a RM100 to make our trip to the nearest ATM machine more worthwhile.

I instill the importance of savings in my children when they were very young. It works most of the time. But Eryn doesn't seem to follow it consistently yet.

Here are my money tips which I found useful. It may not go well with some but it worked for me. 

1. No pampering even if they whine and cry and kick a big fuss out of it.

When Eryn was in preschool, she would kick a fuss about not having that pretty doll that she wanted when we were in the supermarket, or in shopping malls. When she started school, she would sometimes use her pocket money (if she was given) and buy junk food. Brendan, being the rather reasonable one will tell her that we have some snacks at home and that it is always more expensive and unhealthy to buy these stuffs in school. I’m glad they have now grow up to be wise and reasonable when it comes to spending. We do pamper them occasionally in our own ways like getting them what they’ve wanted – that pretty hairband, the  storybook they’ve been eyeing for, that nice pencil box, etc. At times, they may not get what they want, but a clear explanation and an alternative to what they want sets the message clear.

2. Learning from example. My kids have observed from us parents that we do not necessary have to have something just because someone is having it. They used to want everything their friends have – playstation, x-box, branded toys, tons of Barbie dolls or toy cars, Ipads and many more. Eryn still loves Barbie dolls and she treasure her 3 dolls very much which is not sitting in the dark. Brendan has stopped demanding for whatever IT gadgets and is so contented with just having the computer at home to play his online games. Once in a blue moon, we do surprise them with things which their friends get so easily. To them, they know that to have these things require certain hard work from the parents. After all, we are just average income-earners, and now that both of us are in our own business, things do get a little tough at times, and we have learn to live and be content with what we have.

3. Opening a kids savings account and setting goals.This is a must have for my children. I have three forms of savings account. One, which is the bank junior savings account which is for their long term savings plan. Two, is their piggy bank which they can take up to buy anything they might like with our approval (so far they have not used it except for losing a book in school). The last one is a wallet for each of them to keep their money for school pocket money. You may not believe this, but my kids only ask for RM1 for pocket money, that is if they need it. And in a month, I have never ever given them more than RM5, all because they never need it. I do set aside a certain amount which I’ll bank into their savings account for being so prudent, and without their knowledge. They each have a goal in wanting to buy something within a certain time frame. So far, they have not decided to use it yet.

4. Reward and wages. “You need to work for It”. Occasionally,my  kids do get rewarded in things that they do. And these rewards may or may not come in monetary form. It can be a simple holiday trip which most people take for granted. My kids know that a trip is an extremely rewarding thing they would ever have. An outing to my kids favourite steamboat barbeque buffet is much appreciated. As we do not eat out in expensive places most of the time, things like this tend to make them more appreciative and not take things for granted. Think about it. Look at some children around you when you go to a restaurant.. It may be a normal outing for some, it may be a privilege for some.

5.The power of compounding. MY kids know that there is such a thing as inflation and the power of compounding. Well, not so much on Eryn but Brendan understands the power of compounding. The earlier you save, the more you earn. The more you save, the higher your savings would get in later years. They don’t know how exactly it works but let’s just say that it is through our live experiences and observations that my kids learn from.

I encourage my children to save. I help them to set goals and do up a simple dreamboard. I bring them outside and enjoy nature – hiking, cycling, evening walk. And in the midst of these activities, there are things I can observe from their characters. It also get them thinking on issues on life.

Brendan's value of money

As I watch my kids grow day by day, I am reminded of their uniqueness and the special personality in them. They never fail to amaze me with surprises every now and then.

When it comes to money, I've come to realise that Brendan will be someone who would be very careful with his money. He doesn't really know how big the value of money can grow but he can be quite frugal when it comes to money sense.

Just recently, while we were having pan mee for dinner, a salesman walked into the restaurant and showed my kids some toys.

I've always taught my kids that we should never shun these people and the least we can do is just smile and politely decline them as they've spent hours walking around shops and restaurants trying to sell their stuffs. At times, I'd kind of threaten them that they would have to resort to that if they refuse to study hard. hehehehe.

Anyway, Eryn gave the man a smile and shook her head, implying a "no" when the man showed her a toy aeroplane.

The man then walked to Brendan and showed him a car. Brendan being Brendan, just continued eating his pan mee. The man continued, "RM10 only".

Brendan blurted out "RM10?!! Soooo expensive!! I can buy 8 honey apples with RM10".

Now, I could have scolded him for answering the man, but it was really funny to see the man's reaction and we all just have to laugh at the scenario.

Just a few months back, I remember Brendan asking me to take him to the bank as he kept saying that he's got a transaction to do. I kept saying "later" until  I finally asked him why did he keep asking me to take him to the bank.

He said that he's got some money to put in the bank and then I asked him how much. He replied, "RM12". I told him that he's got to have at least RM100 before he come asking me to take him to the bank as it would be a waste of petrol and time and having to pay for parking. So, I gave him a little piggy bank for him to keep his money. He said he'd rather keep it in his wallet which he kept in a special place.

And then, there was this time last year when I was planning to change car. I told the kids about the cost of living, the rate of inflation, expenses going up and we shouldn't spend on an expensive car. Brendan said, "Mummy, I want to buy you a car. Do you think RM8 can buy you a big car?" Gosh, I'm so touched. He actually took out all the money in his wallet and gave them to me. I told him a car cost more than that and we would need a 5-figure amount for that. He can't seem to comprehend anything more than a thousand, or maybe even a hundred and kept asking how do people even afford to buy a car or a house.

He doesn't get pocket money for school cos I pre-ordered food from the canteen for him, so that he doesn't have to queue and rush to eat in his 20 minutes recess. There is a coin box which I told him he can take some coins out if he needs to buy anything extra and he'd just brush it off and say he doesn't need it as the uncle in school always give him too much food.

And just a few hours ago, Brendan said, "Mummy, when my birthday comes, please don't buy me a cake. It's not good to eat too much cake right?" Oh dear!! There he goes again. So, I said, "ok, then maybe we go and celebrate over a simple dinner". He went on and said, "Ok, but don't spend too much. We should save money. Maybe we can go to Disneyland one day".

Oh! That's my boy!! He makes me want to cry for being way so sensible and matured for an eight years old boy.

Oil price increase again!!

I pumped RM30 petrol at around 5pm and before I headed back home today. My phone battery was dead and by the time I got home, I recharged my phone and received 5 missed calls from one friend.

When I called her back, she was telling me that the price of petrol will increase tomorrow! I didn't have trouble pumping petrol earlier on as there was no queue. After cooking, I fetched Brendan from daycare and took him for a drive to the nearest Shell petrol station and was I extremely surprised at the tons of cars queueing up to pump petrol!!

Brendan had the urge to pee and so I stopped at the road side for him to do his 'business' and overheard a man telling one driver that the queue has not been moving for more than half and hour as there was a deadlock at the petrol station.

Brendan actually helped saved my time by not engaging in that stupid struggle to get into the petrol station. Since I was already out, I decided to head to BHP nearby but it was the same predicament. Deadlocked. I decided to try for the third time to Petronas not too far away and somehow manage to squeeze my way through the many, many oil pumps available there.

I've never joined in the crowd when it comes to petrol price increase, but now that I'm no longer in the full-time workforce and budget is a constraint, and inflation chocking us up, I have to be kiasu today and join in the crowd. Well, there's always a first time! It won't be the last time as well. Luckily I had Brendan to talk to or else I will be cursing my lungs out.

Unfortunately, I didn't take my handphone out or else I will have started snapping pictures of all petrol stations all over the place! hahaha

No money loh....

With prices of most things shooting up, we try not to spend unnecessarily on unnecessary stuffs to avoid unnecessary wants, such as branded goods, toys (most are hand-me-downs), going to expensive restaurants, etc.

Poh-poh (my mum) is a very thrifty person and every morning, when she takes Brendan out to buy newspaper from the cafetaria, she'll tell Brendan "You need money to buy newspaper. No money, no newspaper". Brendan will grasp the RM1.20 very tightly in his little tiny fist and proceed to pay the auntie at the counter.

When Brendan doesn't finish his milk, poh-poh will say "Finish your milk, afterwards mummy no money buy milk". Sometimes he does, sometimes he doesn't.

When Brendan doesn't finish his food, poh-poh goes "Finish your food, afterwards no money mum-mum. You see that boy on TV or not? No money, no food to eat loh. Thin Thin Sick Sick" (referring to one news feature of an African boy who was malnourished).

This doesn't happen all the time, unless Brendan is extermely degil (stubborn).

Brendan sometimes has this habit of climbing on my lap while I'm having my dinner. So last night, he took my spoon and ate the rice from my plate. Then he continued pressing the rice and giggling at the rice splattering all over the plate.

"Brendan, mummy is hungry and mummy wants to eat. Please get down", I said to Brendan.

"Clang clang clang...... Brendan cooking", Brendan replied.

Some grains of rice was on the table and the floor and this got me a little worked up.

I told him in a stern voice, "Brendan, see what you did?! Don't play and put the fork and spoon back on the plate! Afterwards mummy no money buy rice, Brendan eat what?!"

Brendan replied in that sweet little childish voice with an innocent look, "Eat tahi lor....!"

Gosh..... I really had to burst out laughing. sigh!