Cutting the “Financial Umbilical Cord”

Cutting the “Financial Umbilical Cord”

Jan 14, 2015

umbilical FQ


My oldest son Martin came up with this expression when he graduated and we stopped giving him allowance. He said, “Ouch! My financial umbilical cord has just been cut!”

Let’s be scientific for a while. The umbilical cord is the conduit or the connection between the developing embryo or fetus and the placenta. The cord enables the supply of oxygenated and nutrient-rich blood from the placenta to the fetus. Conversely, the fetal heart pumps deoxygenated, nutrient-depleted blood through the umbilical cord back to the placenta. The placenta is expelled from the uterus alongside the fetus, 15 to 30 minutes after the birth of the baby.

I hope you imagined the above vividly. Isn’t it a powerful analogy? And that is why I’ve included the cutting of the financial umbilical cord in my steps to raising children with high FQ. I know it’s not very Pinoy to do that, but I think it’s an essential step in raising our children to be independent.

Don’t get me wrong, we’re still very PPP (Pusong Pinoy Parents), our son still lives with us for free, but he pays for his expenses. He can still avail of the “amenities” at home for free, but any additional expense that has to be incurred because of him is under his tab. For instance, the terrible traffic in the metro is his major concern right now that sometimes he thinks of renting a place near his office. He knows that he would have to shoulder the cost of renting, etc. if he does.


Why cut when you can afford?

Because it is an essential step to financial freedom. Go back to the analogy of the umbilical cord. The placenta (the source of nutrients) is expelled and that’s why it’s also called afterbirth. It’s supposed to be temporary only. Our financial support should also be same; otherwise, our children will forever be connected and dependent on our “placenta.” That’s not a very good image both literally and figuratively.

Sad to say, but there are some parents who continue to nurture the dependence because they want to control their children through money. Maybe unknowingly sometimes.

On the other hand, a lot of PPPs are just too over-giving to their children that they forget to set aside for their retirement. They don’t stop providing for their children, sometimes, even for their children’s children. I’m not talking about occasional gifts here but the day-to-day expenses, tuition, baon, etc. Kawawa naman kasi.

I wish to bring back the image of the placenta here. It provides the oxygenated and nutrient-rich blood cells to the developing fetus and it also receives back the deoxygenated and nutrient-depleted blood cells. Imagine yourself as the overstaying placenta. If you don’t cut the financial umbilical cord of your children (or any other dependent for that matter), what will happen to you? Ikaw ang magiging kawawa!

Not cutting the financial umbilical cord also encourages children not to seek employment right away. Sometimes I get irritated with fresh graduates who say, “I won’t look for a job yet, I’ll rest muna.” What? I know college is also hard work and a student deserves a good vacation after all these years of studying, but hey, are you your class valedictorian such that offers have already come your way? And the thing is, the ones who say, “I’ll rest muna.” are not necessarily the ones who worked hard in school. Try cutting their allowance and maybe they won’t have too much fun “resting.” Encourage them to look for a job soon because it’s not that easy to find one that makes a good match with their dream career. And remember, there’s competition out there.


Prepare them well for the Cutting of the Cord

As their parents, it is our responsibility to prepare our children well before the agreed-upon time of cutting the financial umbilical cord.

College graduation is a good time. In fact, in Western countries, it’s sooner than that. And for parents who cannot afford college education, talk to your children well if they need to work after high school, even on a part time basis. This is supposed to be one of the advantages of the K to 12 education system. Someone who finished Grade 12 should be equipped to earn a living. And for some, this might be a better route because not all children are cut for college education.

Here are some steps you can do to prepare your kids for the cutting of the cord:

  1. Start their FQ journey as soon as they’re born. Open a savings account for them and deposit all their cash gifts in their own account. This way, you don’t comingle your funds right at the start.
  2. If you give them regular allowance, keep it on the low end. This teaches them to live within a limited amount. What more, when job hunting comes, starting salaries will not pale in comparison to mom & dad’s allowance. This is another reason why some fresh grads find it hard to accept low starting salaries. They would rather “rest” first. Moreover, with high allowance, the cutting of financial umbilical cord is more difficult because your child would feel like getting a “pay cut.”
  3. Teach them to save regularly. This habit when formed early will be with them forever. When cash comes in, set aside a percentage – Pay yourself first, the first law of money. When they start receiving their own pay, they will continue to save and hopefully, be delighted because the amount is now bigger than their previous allowance from parents.
  4. Bring baon. Both my husband and I brought baon to school and later on during the first years at work. So goes for all our sons. This not only saves you cash but also controls the quality of food that you eat on a regular basis.
  5. Teach them how to invest early on. While they are still your dependents and you can provide for their needs, invest their money in higher yielding instruments like equities or equity funds and hold for the long term. Of course, in doing so, remember the second law of money, “Get into something that you understand and seek advice only from competent people.” Develop their entreprenuerial  spirit so that early on they know that earning money can be both challenging and enjoyable.
  6. Be frugal. Take it easy on prematurely getting them used to designer stuff. Even if you can afford to shower them with these goodies, think of how they will be when they start earning their keep. They will feel a big downgrade in their lifestyle when you cut the cord. So teach them the value of delaying gratification. Heed the third law of money, “Make your gold work for you. Make an army of golden slaves before you buy luxury.” Differentiate what you (their hardworking parents) can afford vs. what they can afford.
  7. Use financial statements to help them delay gratification. Have them prepare their Balance Sheet and update it at least every quarter. Once they regularly see how their money grows, they will have an easier time resisting that latest gadget because they know the opportunity lost of not investing. Moreover, seeing their money grow acts as their substitute gratification. And the bonus is, both parents and children will have an easier time cutting the cord when the time comes. When all the above steps have been implemented, the Balance Sheet would already have a healthy sum that will enable the children to take their first steps of financial independence.
  8. Consider this graduation gift. If you can afford, you may want to give a graduation gift that’s quite substantial (but not too much) to your graduating child. Have some agreed upon parameters on the use of the cash if you want. But that’s it, no more allowance from mommy and daddy.


The key to success in doing the above is to always add fun. Any talk about money should be related to the true purpose, your family’s core values. Do not strain yourselves in over-saving. As I heard my mom say while we were growing up, “Live within your means but enjoy the fruits of your labor.” I guess this is the only way to sustain something that’s a lifetime journey.

Cheers to high FQ and a peaceful cutting of your children’s financial umbilical cord at the right time!



(Rose Fres Fausto is the author of bestselling books Raising Pinoy Boys (download free book sample) and The Retelling of The Richest Man in Babylon (a story and activity book for kids from 1 to 92). Click this link to watch the new and exciting Book Trailer.

To read her other articles go to Author Archive of, and Send your questions and comments via email to To watch her interviews and other videos, go to FQ Mom you tube channel.)

This article is also published in and

Attribution: Photo from