3F Values: What We Taught the Next Generation – Finance

pexels-photo-259165In Part-1, we shared about what we taught our children on family. A Montessori Specialist told me that our parenting approach is very Montessori. So I asked her to highlight what Montessori’s principles my wife and I have applied in parenting the next generation:

“Firstly, you started training them from young during their formative years. You encourage them to learn by discovery. Secondly, you prepare the family environment decorated with love and respect that promotes open communication and responsible behaviors. Thirdly, you encourage them to make wise decisions and mentor them to contribute their talent to society. Lastly, as parents, you walk your talk by being the role models for your children.”

Now in Part-2, we will continue with what we taught our children on finance. There is so much we can share on this subject and would require a separate book to do so in the near future. For now, let’s do a quick listing of 12 areas that we consider essential in preparing our children to handle finance well on their own.

  1. Family Budget. Each year, we have a major family budget meeting as part of our family conference to forecast our income and expenses. When our kids were young, we tracked their personal cash flow each month. If they had surplus money, we would double it as an extra allowance.
  2. Family Inheritance. We practice a transparent policy of revealing to our children how we will divide our assets and cash funds in our will. We believe in non-gender, fair distribution, according to needs and the ability to handle wealth so that the same can be multiplied for future generations.
  3. Financial Independence. From young, our children have learned that money doesn’t grow on trees. Each child was given a minimum allowance, enough for meals and other expenses. For worthwhile projects they took up, they received only seed money and needed to figure out how to obtain the rest through legitimate trading or business innovation.
  4. Generous Giving. We taught our children that the time to give is not when we have plenty. If we learn to give $1 when we only have $10, it will be easier to give $100 when we have $1,000. We can only lose what we are hoarding and not what we have given away. We practice tithing as a way of life. Money should be set aside to bless parents and immediate needy family members who labor with their hands.
  5. Light Material Touch. We teach our children that anything that can be solved with money is not a big problem. We are to value people more than things such as cars or hi-tech gadgets. Use things to bless and help people. Once, our boys emptied their piggy bank savings to help a family pay off mounting credit card debts.
  6. Cultivate an Entrepreneurial Spirit. We didn’t pressure our children to study medicine, engineering, law, accounting or pharmacy. We encouraged them to follow their dreams. For whichever path they chose, we advised them that in their 20s, finding the right mentor was more important than getting a good job with a high salary. We told them that at the right time, with their accumulated wisdom and knowledge, they could start their own business. We inspired our children to be job creators, and not be job seekers. Thus, they will never be unemployed.
  7. Stay Debt Free. We remind our children that they came into the world debt-free, so they should not end up in debt. All credit-card bills must be settled in full each month and they should not resort to just paying the minimum amount. If they don’t have the means, they should delay the gratification; create the means first and never spend more than what they have. Should they ever borrow, the cost of borrowing must be much lower than the returns. We always stress that the borrower is a slave to the lender.
  8. No Co-Signing. We don’t co-sign for anyone nor do we act as a guarantor for anyone. In fact, we do not invest in any investment that we can’t afford to lose. We always remind our children to never share their “purse” with those who don’t share their vision and values in life and to have nothing to do with money accompanied with sorrows.
  9. Cash Reserves. We advise our children to build up cash reserves of up to a minimum of six months to maintain their current life-style if they don’t have an income. We remind them that as we grow older into our 50s or 60s, we still have a good 20 to 40 more years of living before us. If we don’t have enough cash reserves or a passive income, we had better make sure that we are still relevant and physically fit with skill sets or knowledge that is in great demand. We choose the path to have both the reserves and also to be fit to work with what we enjoy most, yet be able to generate multiple streams of income, especially through new business creations.
  10. Wedding Budget. We stress that a joint account can only be undertaken after an official marriage registration as husband and wife. We advise our children not to spend money on a lavish wedding ceremony beyond their means that would cause them to suffer after the wedding. Putting money aside to build a life-long happy marriage is more important than spending on a one-day affair to show off to our wedding guests.
  11. Financial Integrity. We teach our children to upkeep financial integrity in paying lawful taxes and making legitimate money without causing harm to self, others and the environment. They are not to be involved in trades or businesses that pervert justice. They should be honest with their money and preserve their reputation, even if they lose money.
  12. Financial Education. We believe that financial education is our personal responsibility and not that of schools or public institutions. We teach our children how to make, save and multiply money, how to maintain and protect money and, finally, how to wisely distribute wealth to worthy causes.

“The Testing Ground of Faithfulness is Money!”

In Part-3, we will continue with what we taught our children on Fitness.


DrPeter

About the Author: Dr Peter Ting is the President/CEO of Family First Malaysia, committed to TRANSFORM Next Gen Fathers, supported by Mothers, to build Better families resulting in a Better Workplace, a Better Society, and a Better Nation. Since 2014, Dr Peter has “retired” from his full-time corporate career. Now, he uses his time to mentor Gen-Y CEO Couples, and Gen-Z leaders as tomorrow’s entrepreneurs. For more information about Dr Peter, see here.