KC See, serial entrepreneur, author and international trainer and co-founder of Young Money Master, shared bad money habits that affect the younger generation nowadays.

Most parents are concerned because their children are spending beyond their means on things that are not necessary in their day to day lives. They never stop asking for the latest gadgets such as iPhones, or iPads, or i-this, or i-that. They are growing up not capable of managing the money their parents give them or they simply don’t have good money habits.

Now, some parents find it very challenging to teach their children about money. Unfortunately, some children don’t appreciate the value of money as money comes too easily for them. These are the common challenges that parents, even myself, face in today’s environment.

The financial health of every individual is of paramount importance in the quest for attaining a good quality of life. Too often, most young adults only start looking at their financial health when they have started working. Unfortunately this might be a bit too late because the bad habits have been there since they were very young.

Money-Saving Generation put out a survey about children and their financial health and here are the results:

  • 5 out of 6 children will be left behind in the global economy.
  • 4 out of 6 will never be able to manage a household budget.
  • 3 out of 6 would not know how to save for retirement.
  • 2 out of 6 would not know how to balance a checkbook.
  • 1 out of 6 is likely to declare bankruptcy during their lifetime.

This might sound unbelievable, but the results of their survey are relevant in today’s society.

So, why is financial education important?

It’s important because it is becoming increasingly tough for our next generation to live in our current economy. In this country, for example, we are all aware that the cost of living is going to go up this year.

In the past, one job is enough for the entire family wherein the mother can be stay as a housewife and look after the children. Today, both parents have to work. Yet, despite both parents working, families are only saving enough to make ends meet or, sometimes, merely surviving. If you think that the children growing up and attaining their professional degrees would be enough for them to do well – it’s going to be more than that.

Every day we can read in the newspapers the consequences of financial illiteracy. Household debt is standing at 83% against GDP making us the highest in Southeast Asia. We have to wake up to the fact that our environment, our families in this country, people are just owing too much money.

Because of financial illiteracy people are so easily swayed by advertisements and impulsively make purchases that are beyond their means.

My son recently brought a pair of slippers. He is not bad with money. He’s not someone who spends money frivolously and he’s quite a good saver, but recently he bought a pair of slippers that cost RM200. Even he felt it was too expensive.

I said, “Son, you bought a pair of slippers for RM200? My shoes are only RM200. You spent RM200 on slippers.” He said, “Well, all my friends are wearing the same slippers.”

Our children are constantly exposed to peer pressure. When their friends want to do something, they also want to do something. People are even willing to spend RM380 million on a toy set. That’s simply insane.

So, one of the consequence of financial illiteracy is your children might become extravagant on their spending because of societal pressure. As a result of that they grow up accumulating a massive amount of debt.

For video on Raising A Financially Smart Youth, please click the video below for more details on:

– How to teach children about money
– What are the bad money habits to avoid?
– Financial education – why start young?
– How to Nurture Financially Smart Youth
– Financial Roadmap to WEALTH


KCLau
KCLau

Personal finance author and trainer

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