My wife and I have 5 children. The girls are, Along, 21, Azah, 20, Nana, 12 and Ain, 9 and our only boy, Abang, 13.
We are just as concerned as any other parent that our children should grow up stable, well rounded, respected and respectful members of the community we stay in. And personal finance is one area we want to make sure our children, if not excel, should at least do well.
Imparting these lessons has been one of my wife’s and my goals for some time now, or rather a wish. A strong wish, no doubt, but still just a wish.
I call it a wish, as it had no specifics, had no measurable metrics and no time limits.
Not any more. Thanks to the knowledge learnt from the pf blogs I follow and some serious thought, this wish has now crystallized into SMART goals for my wife and me.
This is my story.
The two most important PF lessons that I have learned, are:-
a) Paying myself first or living below my means and
b) Having a peer group with PF as an “agenda item”.
I believe that if a person masters or is comfortable with (a) and has a good peer group that avidly discusses personal finance, then he or she is well on his/ her way to financial independence. In fact having (b) should also lead to (a).
My wife and I have set ourselves the following goals as part of our goals for 2008.
i) To ensure that the 2 senior girls, form or join a peer group with PF as a core subject, and
ii) To ensure that the 2 younger children learn to pay themselves first.
And our plan to achieve these goals:-
i) Goal (i)
– We have tried asking them to form a peer group themselves, it has not worked. They are in college now, and though they have made some solid friendships, none of their friends seem interested in this idea now.
– I have enjoyed great positive effects from reading pf blogs. Since my daughters belong to the generation that is very comfortable with the Net, I have given them a list 5 pf blogs that I think they may find interesting. It is possible that my girls may well decide that some other pf blog is more their type. This will be fine with us.
– We have offered them monetary rewards for every comment they make on these blogs. These comments must be accepted and published by the blogger.
– My children have to email me the URLs so that I can keep abreast of their comments.
– To comment, the girls have to read the posts. I am sure that some interest will be generated, from posts which should be close to their hearts now, for example those on career guidance, tips on facing the interview, etc.
– Over time, we expect (and hope) our children to start having an interest in the lessons these bloggers post, and for this interest to grow. These blogs will then become their peer group.
ii) Goal (ii)
– Give the younger children (except the youngest), a weekly allowance.
– Sign an agreement with them on this allowance. They have to keep accurate and neat accounts and save at least 10% of the amount, (they can save easily by taking packed lunches to school).
– Thanks to another pf blog, I have a great model to follow for this agreement. Used by none other than John D. Rockefeller himself, and edited to suit our purpose. I forget the name of the blog that pointed this out. I am sorry.
– Fixed targets have been set for their savings for the year. At the end of 2008, we shall go to the bank and deposit their savings in a bank account. I have agreed to contribute 300% of their savings as a top up gift. (So as you can probably guess, the targets are modest….baby steps, baby steps first)
Do our goals meet the benchmarks for well set goals? Let’s run through the checklist.
Do we have a strong desire for the goals? But, of course! Our children’s education is very high in our list of priorities.
Are the goals specific? Yes, they are.
Are they measurable? Yes, the elder girls have to post comments, which can be counted. We have not set any numbers on the comments they should post. We believe we should leave it to the girls to decide for themselves.
The younger children have a target amount to save and a date by which to achieve it.
Are the goals achievable? Yes, they are. All our children now accept that goals are something that they want to do, as opposed to being forced to do. (Or are they just saying it???)
Are the goals realistic? I think they are.
Do the goals have time limits? Yes, the target dates are 31 December 2008, and we shall have periodic reviews.
Will we achieve the goals? We feel well prepared and are looking forward to marking off these goals as done.
Nevertheless, my wife and I have to delicately balance our wishes and plans against the comfort levels of our children. It is likely that many, if not, most of our children’s friends’ parents would not be doing anything similar, so there might be some negative peer pressure from their friends at school or college.
Time will tell. My wife and I just have to find their “switch”.
We’ll appreciate any ideas, comments or advise from like minded parents out there, who have walked this path before.