Any parent will tell you they want the best for their kid. What differs is what each one considers the “best”.
Some parents will wield the cane to ensure their kid gets good grades. Others believe that balance and a happy childhood are more important. Some want their kids to have all the creature comforts you could possibly desire including iPhones and iPads, while others think it’s more important to teach their kids the importance of having a good work ethic.
But nobody wants their child to not be able to handle their own finances when they grow up. Here are three things you might be doing that could turn your kid into a financial disaster.
Buying your kid everything he asks for
Kids these days want a lot more than just Transformers figurines or Legos. If you accede to your kid’s every request, you could exhaust your retirement fund paying for iPads, Nintendo 3DSes and kick scooters.
But worst of all, by buying every single thing your kid asks for, you run the risk of raising a spoiled child who has to have everything he wants right now. Your kid might throw temper tantrums when you don’t buy him what he wants at Kiddy Palace, but caving in is the most counterproductive thing you could do at that point.
That’s because a big part of managing your own money is delaying gratification—such as by saving and investing for the future rather than spending all your cash on shoes. Not teaching your child to take “no” for an answer could turn him into the sort of adult who has no self control in a shopping mall.
Telling your child he’ll inherit your wealth
Remember that scene where Mufasa tells Simba “One day son, all this will be yours?” Pull that trick in Singapore and you can bet your kid will be twiddling his thumbs until that day actually arrives.
When you do that, you’re sending out the message that your child will be financially taken care of in future. Even the inheritance of a simple HDB flat can be a huge financial boon, given the high cost of property in Singapore. Why bother to work hard when there’s money coming your way in a couple of decades?
This isn’t something you want to tell a kid, especially when he’s at the age where he’s susceptible to turning into an entitled brat. Save that conversation for when he’s older and more mature, and has already learnt the value of financial prudence and hard work.
Encouraging him to enjoy the high life
You work hard enough to allow you and your family to enjoy a few treats here and there. But try not to go overboard and turn your kid into someone who aspires to live a life of luxury.
Some parents think that by giving their kids an appreciation of the finer things in life, they’re motivating them to work hard for their own future. I know someone who flew her kids in First Class to show them how much better it is to be rich.
But guys, it’s usually poverty that drives people to work hard and manage their finances better, not wealth that’s been doled out for free by doting parents.
Instead of encouraging your kids to live lavishly, show them how to enjoy the simple things in life instead. Spend time with them instead of buying them more stuff, encourage them to do instead of acquire things. Then you can rest assured that your beloved son is unlikely to become the kind of person who buys cars to impress girls.
What have you done to ensure your kids grow up to be financially literate? Tell us in the comments!