Question: Hi Rose. My name is Ana, I am a single mom of a teenage girl named Samantha who is now 13 years old.
Sam and I just had an argument about financial stuff because she wanted to sell the gadgets she wasn’t using to buy a new cellphone. Naturally, as a single mom struggling to make ends meet, we had this argument where I insisted that a new cellphone would not have “value added benefits” over her old and still reliable one.
However, I am not the best example for her when it comes to financial literacy as I am struggling to get out of the slump myself. Thus, when she asked what I meant by “value added benefits,” I told her the one thing that I can actually expound on (via Rich Dad Poor Dad) – INVEST.
We had a very long discussion on investing and it was something I really couldn’t sustain with my very limited knowledge and hands-on experience. Thus, I tried to look for articles and chanced upon your article entitled Teenagers Interested In Investing dated November 2012.
I would like to expose Sam to the world of investing and I know that, as much as I want to be the one to do it, I am just not equipped. Would you perhaps have a Seminar or a Talk that would help me jumpstart her interest on it? I too am attending seminars on Financial Literacy but I’m afraid that these are not the ones for her age group.
I would appreciate your help. Thank you.
Answer: Hi Ana. A lot of parents share your predicament of teaching their children about money matters when they themselves are not confident about their own money skills. However, I am a believer that parents are still the best teachers to their children because when it comes to money, we’re not just talking about a set of skills but a value system and values are better caught than taught. Be honest with Sam. Tell her that you want to raise her to have a high FQ and that you will be joining her in this journey because you want to raise yours too.
Here are some of the things you can do together.
1. Understand your own relationship with money. You may want to read my previous article entitled How Can I Teach What I Don’t Know? Do the exercises in said article. Share it with her. She may also want to do the exercises.
2. Discuss and write down your dreams together and use your core values as your guide. Allow Sam and yourself to dream big. You may even use photo collage when you two come up with your dreams. Working your way to improve your money skills and disciplining yourself will become more worthwhile and sustainable if you visualize what you’re working for. I’d like you to use the guidelines in this article.What You Do With Your Money Should Agree With Your Core Values.
3. Make your respective Balance Sheets. It’s good to know where you are financially right now so you have a clear starting point and know how far you have to go to reach your dreams. I’ve written about personal Balance Sheet a few times and this one might interest your teenager Selfie And The Balance Sheet.
4. Based on your balance sheet and the asset inventory that you did, sell the things you’re not using anymore. You mentioned that Sam wanted to sell her unused gadgets in order to buy a new cellphone. You should at least commend her for thinking of liquidating NPAs or non-performing assets. Hopefully, once you’ve done steps 1 – 3, she may not be that interested in buying a new cellphone anymore while hers is still functional. She would have realized that there are other more important things that she can save up for, that we don’t only save in order to have something to spend right away, but also to have something to invest. This brings us to the next step.
5. Teach her the magic of compounding. My sons were blown away when they first saw how regular saving can grow into something very big. You can download an excel file for free from RaisingPinoyBoys.com – Magic of Compounding so you and Sam can work on your respective saving and investing schedules. Maybe she can now regularly save from her allowance to help fulfill her dreams. Read Your Children’s Weekly Allowance: Best Training Ground To Raise Millionaires.
6. You’re right that some of the Financial Literacy Workshops that you attend may not be appealing to your teenager. Every so often I’m able to bring my sons to join me in my talks, and it’s different when teenagers hear it from fellow teenagers. If you follow me on facebook, twitter and instagram, you’re bound to know when these talks happen, so watch out. For the meantime, check my Author Archive and see what other articles may be helpful to you and Sam. My new book The Retelling of The Richest Man in Babylon is also a helpful read for the two of you because it talks about the three basic laws of money in very simple language.
7. Check out investment instruments available at your friendly bank and other financial institutions to see what works for you. Small business ideas that you can do on the side to augment cash inflow are also welcome.
8. Find inexpensive bonding activities with your daughter and check out each other’s saving and investing development from time to time. You have just found yourself a saving and investing buddy in Sam! Isn’t that great?
Cheers high FQ to both mother and daughter! Do give me feedback that we can share with the readers.
Wishing you financial happiness,
The following twitter users won in last week’s “Spot Me” contest:
Please email your name and address to FQMomm@gmail.com (yes that’s double “m” at the end). Congratulations!