RISMEDIA, May 12, 2009-Whether you’ve been hit hard by the recession or not, kids and families may be reeling from the effects of the troubled times without a frame of reference for how tough it is out there.
Arun Abey, former Wall Street figure and author of the book “How Much is Enough?” believes that parents don’t just need to teach their kids about finances, but also about the balance between money and quality of life.
Abey offers some basic tips for families who want to get themselves – and their kids – smart about financial matters.
-Don’t Let Money Be Invisible. Today, money comes out of ATMs and is spent via debit cards and credit cards – invisible to kids as to where it comes from and where it goes.
-Give Kids Responsibility for Spending. One of the ways to get kids to learn how to manage money is by placing them in charge of their discretionary spending. If they receive an allowance, parents should require their kids to record how it’s spent.
-Teach the Power of Investment. Parents should help their kids set up a savings account, but then explain the value of investment. For example, a simple investment of $100 in a basic savings account can result in a balance of $12,000 after 20 years.
-For Love or Money? Most families try to direct their children toward high-earning careers, such as medicine, high finance or business management. However, there is an alternative method that directs children toward career paths that stress their passions. This path stresses lasting fulfillment over financial rewards, even though, in many cases, people wind up with both by following this path.
“I can’t think of a more important moment in our country’s history to teach these lessons,” Abey said. “The current financial crisis, caused equally by reckless bankers as well as uninformed consumers, underscores the need for this kind of education and understanding.”
About Arun Abey
Arun Abey is Executive Chairman of ipac and Head of Strategy for AXA in the Asia Pacific; a part of the global AXA group that manages over $US1.5 trillion of clients money and is ranked as 15th largest company in the world by Fortune Magazine.