Jan 09, 2013

Question: “Hi, I am a single parent raising two young children. I want my children to be financially independent when they become adults. But won’t teaching them stuff about money too soon rub them off their childhood? Sometimes I fear that if I introduce money matters to them too soon they might think that money is the most important thing in the world. We are financially ok and I believe that money can’t buy you happiness. What do you think?  – Single Parent via email

Answer:Hi Single Parent. I wish to share with you what the 70s-80s sexy star Bo Derek said: “Whoever said, ‘Money can’t buy you happiness simply didn’t know where to go shopping!’”

It’s a funny quote and every time I flash this on the screen during my talks, I see a lot of nods and hear side comments from the audience, especially among women. So I guess you’re a single dad not a single mom?

Kidding aside, there’s a debate about this quote. But I think its original intent was to point out that even some people who have all the money in the world could still be sad, and sometimes even depressed. But if you look closely, the sadness or depression was not caused by money per se but by the other circumstances in a person’s life.  Sometimes if the problem has a lot to do with money, chances are the problem is his relationship with money. Money is neither good nor bad.

To study the relationship between money and happiness is akin to understanding the relationship between good health and happiness.

Do you notice how most people give no thought to their health when everything’s ok? They eat what they like to eat. They don’t exercise (well, except maybe right now because they just made their New Year’s resolutions). They stay up late at night. They go to parties and vacations. They enjoy all these fun things in life without correlating their happiness to having a good health. They fail to see how good health makes them happy until they get sick. It’s the absence of good health that makes them conscious of the correlation between the two – i.e. good health propels them to do all these things that make them happy.

In the same way, when there’s enough money to spend, people don’t usually give it a thought. It is when there’s lack of money that they feel the unhappiness because they cannot afford to buy the things that they need and want. They can’t even do the simple things that make them happy, even if free, because they’re so stressed out trying to make both ends meet.

It’s also like a person who’s always there but is taken for granted. It’s only when he’s gone that others will become conscious of his importance. Losing something or someone has the power of jolting us to awareness and action. But do we really want to wait for that to happen?

Here lies the danger faced by children who were brought up by affluent parents who did not bother to teach them financial literacy. They might think that money is an infinite resource and they will have difficulty in their adult life when they start fending for themselves. Or worse, if something drastic happens now and the seemingly infinite source of cash runs out.

I’m happy that you’re able to provide for your young children but maybe you should not wait for crisis to befall your family before you start teaching them about money.

Just give them age appropriate lessons. In fact, don’t even call them lessons. Make it fun. If they’re into board games, play Monopoly or Millionaires with them. If they like computer games there are a lot to choose from (check, and my previous article about games by clicking this link). And the best of all, be a good model to them. Later on they might become interested to invest on their own. And don’t forget to impart your values whenever you teach them about money. Because in the end “Money can only buy you happiness” if what you do with it agrees with your core values. Otherwise, no amount of money in this world will make you and your children happy.

Here’s wishing you and your kids financial happiness!