CHILDREN ARE like sponges; they generally absorb knowledge fast. Parents can take advantage of this wonderful time by teaching them about money early on.

In Rich Kid Smart Kid, author Robert T. Kiyosaki wrote: “I am often asked, ‘At what age should I start teaching my child about money?’ My answer is, ‘When your child becomes interested in money.’”

Lifestyle trainer Chinkee Tan, author of the book Till Debt Do Us Part, shares that kids can be taught about money as early as four years old.
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IT’S Wednesday as I write this. These past two days, Monday and Tuesday, I saw my retainer fee for the month from a publishing company disappear–in just two days.

First, my desktop computer refused to do anything at all, and so I brought it to the computer shop. It turned out that the power supply is broken and the video card sympathized with it and broke down as well. Since the computer guys were tinkering with the CPU, my son and I figured we might as well add 1 gigabyte of RAM.

Then on Wednesday, it was time for the car to have its 40,000-kilometer check up. This does not come cheap, I realized, especially after I OK’d a rustproofing job, etc.

So there, a whole month’s work pay gone in two days. Why does money “evaporate” so fast?

Parents with school age children may be thinking along the same line at about this time of the year. With tuition fees the way they are now, it’s no joke to send one child to private school. And what now if there is more than one child?

I learned from a financial management talk I attended years ago, that one must prepare for annual expenses by saving for it monthly. Take tuition fees, for instance. See how much the annual fee is for next school year, divide the amount by 12, and begin saving that amount monthly this June. This can be done as well for other annual expenses: car registration fees, annual income taxes (for the self-employed), and insurance premiums. As for repairs and maintenance expenses, saving a little more for this purpose every month will cushion you from the shock of getting your repair bill in the future.

Preparing for big expenses this way will help you avoid panicking when it’s time to pay up. Save, save, save.-Karen Galarpe

FOR THOSE of you who made it your New Year’s resolution to spend less and save more, how are you in the compliance department? I know it’s not easy to do so, but really, as simple as it sounds, that’s how you can have more money left at the end of the month or year.

I’ve shared my own peso pinching tips to friends:

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This is a guest post from Rose Fausto, mother of Anton, the young boy I featured in my article 12-year-old investment whiz kid:

Thank you very much for that nice article you wrote in Money Smarts.  We showed the article to Anton and he was thrilled but I guess the parents were more excited.

I read all the comments and was happy to hear the nice ones, but of course, the mother hen in me was not so happy about a couple of comments calling our kids brats and my boy brash because he paraded his “total assets.” Someone also said that these amounts might have just been given to the kids. Anton was more calm about the comments, saying, “That’s ok lang Mommy.”
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For many of us, financial lessons for our kids involve loosey-goosey lectures on wants and needs and “money doesn’t grow on trees” kind of things. Perhaps some parents go to the extent of opening up a savings account and explaining the magic of compound interest. Perhaps.

From time to time, though, someone like 12-year-old Anton Fausto comes along, making you realize how easy it can be to underestimate what children can learn.

We were at the set of Shoptalk at ABS-CBN News Channel (ANC) last Monday where host Pia Hontiveros interviewed four kids about saving money at a young age. Each one had an amazing perspective on money: Melvin Esteban’s eight-year-old niece Maxine, Randell Tiongson’s 17-year old daughter Ysabella, my 13-year-old Alix Danielle and Anton.

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“How do you teach children the difference between wants and needs?” a viewer texted ABS-CBN’s Shoptalk yesterday after host Pia Hontiveros and I spent the better part of an hour talking about financial literacy for kids.

The studio lights felt warm on my face and the ticking clock made me mumble a couple of excuses for an answer. My daughter and best critic who was watching assured me I did good, but in the harsh reality of 24-hours-after, I am now mortified at how I missed the opportunity to dissect a very important personal finance dilemma for parents.

Forget teaching most adults about wants versus needs. Most of us are hopeless. But children? The spending habits we instill in a child will make more impact on his financial life than any investment he may make in his future. I can’t even begin to explain how critical it is for a child to have a clear grasp of this concept.
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What do you give to someone who has everything?A few Christmases ago, Synergeia Foundation president Milwida Guevara found herself worrying what to give to Washington Sycip for Christmas.

Apart from being a well-known figure in the business sector, Wash is one of the reasons Synergeia can do so much work in the education sector, Milwida says. (If you are interested in reading more about this very interesting man, read my favorite professor’s blog post on him here. Butch Dalisay finished his biography on Wash Sycip just this year.) After agonizing about her problem, Milwida bought Wash a toy train that moves on its tracks. You know the type, either your son wants one or your husband does.

“He was so happy with it, he played with it in his office and called his staff to look at the train,” Milwida told me, laughing.

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The urge to splurge and miserly behavior are on opposite sides of the spending habit spectrum, but it’s not too hard to imagine most of us swinging from one side to the other at any given time.

That’s because everyone has weaknesses. I’m not very particular with electronic gadgets, for example, so I lived with a Nokia 3310 when everybody was taking snappy pictures with their latest model mobile phones. My friends told me that was super miserly behavior.

Get me into a kitchen showroom, however, and I will be hard-pressed to don my frugal hat. I “NEED” everything that comes with a nice kitchen, although I don’t know how to cook well! I thought I was moneysmart and was in my safety zone until the kitchen showroom came along. Then boom, sorry spending plan for 2006!

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I woke up to an ache in my chest as I read the morning paper.

Mariannet, the 12-year old child who hanged herself last Nov. 2, was my daughter’s age. She is one of 11 million Filipinos who share a strange kinship with one billion more across the globe who live on less than a dollar a day. Her diary says she killed herself because she lost hope her family will ever get out poverty. Her wish list found in her diary was short: a bicycle, a school bag and jobs for her parents.

“Gusto ko po sana magkaroon ng bagong sapatos at bag at hanapbuhay para sa nanay at tatay ko. Wala kasing hanapbuhay ang tatay at nagpa-extra extra lamang ang aking nanay sa paglalaba,” she said in her “Wish Ko Lang” letter. [I wish for new shoes, a bag and jobs for my mother and father. My dad does not have a job and my mom just gets laundry jobs.]

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Oh you better watch out, you better not swipe, you better not flaunt your shiny new card. Christmas spending is coming to town.

Ok, ok, so I’m not the best songwriter in town. :p But the fact is, most of us do have hangovers come January – the kind that make it so hard to go to the bank to pay our credit card bills when Jingle bells no longer chime.

The spendmaster in me talks like a well-meaning conscience: Oh come on, it’s Christmas! What else do you work hard for? The children need the memories, the magic, the gifts, and the ambiance! You can always pay for all the expenses next year. (Voice becoming shrill and high-pitched towards the end of the argument.)

(Photo credit: AFP)

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