Money conversations, growing up

Growing Up is an English-language drama, which debuted in 1996. It had a total of six seasons, set between the 1960s and the 1980s. I have fond memories of watching this drama series in my mid-20s, and I watched it again on Netflix recently.

In episode 3 of the third season, titled “Count on Me”, the spotlight fell on David Tay, the third child in the family, and the brainiest one with an overseas degree. He is a civil servant and earned the most among the four children. In this story, David lied to his mother (Madam Tay) that because he had to help a friend in need, he could only give 40 per cent of what he usually gives to his mum.

The truth was, he wanted to buy a car. Madam Tay didn’t like to discuss the topic of money with her children because she felt it can affect relationships, and she chose to trust David in this instance. Meanwhile, the refrigerator at home broke down, but she didn’t have enough money to repair it.

So, Madam Tay had to ask for more money from her husband, Mr Tay, as well Gary, the eldest son and the least educated at home who is running his own carpentry shop and not doing too well financially. This went on for four months, until one day, Madam Tay discovered by accident that David had lied to her. Worried that he might be in some trouble but unwilling to confront him to talk about it, she asked Gary to speak with him.

They got into a fight instead, and the truth was revealed. Mr Tay was furious and asked David to return what he “owed” to his mum. While Madam Tay was unwilling to force David to do that, Mr Tay believed that it was important to show tough love so that David would learn.

Unfortunately, David did not. The next day, he borrowed money from his friends, and slammed it down on the table in front of his father. Madam Tay finally spoke with David about the incident and explained to him why he was wrong, and highlighted the good intentions of his father and brother. David subsequently repented and reconciled with his father and his brother.

The one lesson that we can learn from the Tay family is that it is important to have authentic money conversations at home. This is because while money is a medium of exchange, an enabler to life goals and options in life, it can represent so many underlying beliefs and convictions, which, many times, can be unhealthy. But when used correctly, it can also bring out the best in humanity, and that is why having an honest conversation at home is important. But what kind of conversations?

On spending below your means

My wife and I have always taught our children to spend not only within their means, but also below their means. This means not spending even when you can afford it, especially when you don’t need it. Even if you need it, there may be a more cost-effective alternative. Two years ago, my son suggested changing our decade-old TV to the latest and much larger smart TV. We reminded him that our TV was working perfectly well and there was no need to do so. We used our fridge for almost two decades before it broke down. Every time something breaks down, we try to repair it first if it makes sense, and each time we did so, we explained the reasons.

On not making money easily accessible

Several years ago, both my children wanted to learn driving. Although it is a good skill to have, we feel that it is still a “good to have” rather than a “must have”. And they will probably appreciate the lessons more if they paid for it themselves. We told them they should pay for it themselves, which they did from the money they earned through part-time work.

On the meaning of money

As my children grew older, they began to realise the power, status and identity that money can bring. That was when I started having conversations about the meaning of money with them. I shared with them that the unfortunate reality is, the world will judge them based on what they have or do not have. So they should go out there and get whatever they need so that they can be heard, and positively influence the world. But be always humble and never judge others based on what they have or do not have, because this thinking is wrong. Material possessions do not define us. 

On saving and investing

Over time, my children became more interested in the topic of saving and investing. I started teaching them how they should budget – first setting aside enough for emergencies, and parking their funds in instruments such as Singapore Savings Bond (interest rates from fixed deposits and T-bills weren’t attractive then). When they had done that, we began to discuss investments using low-cost instruments such as exchange-traded funds and market-based funds. We also discussed cryptocurrency, and I dabbled in it with them so that we could learn more about digital assets. Doing so gave us a common topic to discuss.

On filial piety

I often hear parents say that when their children grow up, they would not ask them for money. They are happy if their children do not borrow from them. But when my children were younger, I told them that when they started working, they must give us a fixed monthly allowance – not because they need to give, but as a way to show filial piety. Some may argue that there are other ways to be filial. Others may feel that the children must initiate the giving. But how would the children know if we don’t teach them from young? A monthly allowance is still the most direct way to show gratitude to parents; it requires some sacrifices on a consistent basis. Since my son started working, he has been giving us a monthly allowance.

As the episode in Growing Up came to an end, Gary explained to his brother the significance of giving money to their parents. “We give allowance to our parents not because they need the money, but because it is our way of showing them that we appreciate them,’‘ he said. A few months before my mum died this year, she told me that I could stop giving her money. She said she didn’t spend it anyway. But I continued, and wished I never had to stop.

To be honest, some of the money conversations I had weren’t easy, and I had to show “tough love”. But I know my children will be better off having had these conversations early. When I need to have financial legacy conversations with my children in the near future, it will be easier.

What are some of your money conversations with your family? Do write to me and share them with me.

The writer is CEO of Providend Ltd, Singapore’s first and probably sole fee-only comprehensive wealth advisory firm. He can be contacted at chris_tan@providend.com.