Dear Parents, Do Not Be A Victim Of Your Own Money
When it comes to raising a child in Singapore, one needs to properly and carefully sort out their finances, be it for the short or long term. With every child, comes a whole new set of financial responsibility that parents must be ready to take on.
We spoke to Mr Firdaus Anuar, Group Financial Services Director at Millennial Financial Advisory Group (MFAG) about the different challenges and concerns that parents go to him and his associates for advice. Having been in the finance industry for more than a decade, and being a proud father of four, he shares with us some tips that could prevent new parents from falling prey to bad financial decisions.
Do Not Let Social Media Make The Decisions For You
Many of us are exposed to and influenced by other parents on social media who would show the different establishments that they are bringing their children to, or the different brands that they are using or buying for their children. “Nothing is wrong with wanting only the best for your child, but know what you need for your child, and what you merely want for them,” explained Mr Firdaus.
“If you can afford it, sure go ahead but these temporary decisions can result in a more long-term financial downfall in your child-raising efforts,” he added. He admits that as a parent himself, one can get easily influenced seeing and hearing other parents buying luxury items and lavish gifts, or frequent high end staycations - which can be quite costly if done on a regular basis.
Educate Your Kids On The Value Of Money
While parents ultimately control their child’s financial wellbeing, a child is never too young to learn the importance of saving and the value of money. “Our children need to know that money does not come easy and that they have to work hard for what they want,” explained Mr Firdaus. One way this can be done is by practicing a reward system where parents purchase an item of the child’s desire after he or she completes certain tasks such as reading a book, or shows consistent admirable behaviour. “While the act could be simple, it teaches them a lot about the value of a dollar,” he added.
Saving and donating are also practices that are strongly encouraged when children are about three or four years of age. “This is important to be taught to kids so that as they grow older, these good habits become second nature to them.”
Expect The Unexpected
It is a good practice to do a financial forecast before deciding to raise a child, considering the prices of milk formula, diapers, childcare etc., but always remember to set aside budget for unforeseen circumstances, such as hospitalisation and immunisation bills, and not forgetting the items that they might request due to peer pressure. “Raising a child now is definitely different than how it was in the past. Social media has caused many to desire an “expected” lifestyle that one needs to adopt, which are sure to be costly - and these are things that might not be accounted for during the initial budgeting,” explained Mr Firdaus.
Furthermore, our education system are encouraging students to develop and hone their non-academic skills such as in music, sports or the arts. This means that parents will need to expect to spend more for enrichment classes or workshops to maintain their child’s holistic development.
Parents need to be very clear between the needs and wants when it comes to their children. With the high cost of living in this country, one must be smart in managing its finances.
“If you can afford it then sure, treat the family to a good time. But do not overdo it as it will most likely result in a blow to your finances - which could affect you for a long time to come.”
This is a sponsored article by Millennial Financial Advisory Group (MFAG) - MFAG is a full-Muslim financial advisory organisation that aims to improve the community’s socio-economic status through smart and effective financial planning. MFAG’s focuses on a holistic Muslim financial planning service that includes zakat, investment funds, assets planning and more. MFAG strives to provide value through long-term relationships for the best client experience. For more information, you may check them out on their social media platforms (Facebook & Instagram), @mfagsg or email them at firstname.lastname@example.org.