Question: Hi Randell. I’m a mom of two kids—a 3-year-old girl and a 4-month-old baby. I know that they’re still too young to understand what money is, but my husband suggested that we already start teaching them the value of money. I think this is a good thing. Soon, they will be in school and I want them to use their allowance wisely. What’s the best way to do this?—Dina, from Facebook

Answer: Dina, I’m glad you’re already thinking about how to pass on important money lessons to your kids—especially since money management is not part of the typical school curriculum. As a parent, your kids will look up to you for these important financial lessons. In fact, research says that kids start inheriting money habits from their parents as early as 7 years old. Early childhood is a great opportunity to pass on healthy attitudes towards saving and investing.

Your kids are indeed young, but if your 3-year-old is old enough to count, then she is old enough to start learning about money. Start by sneaking in some money lessons in a playful manner. For example, nursery rhymes are a great way to start instilling a money mantra. Create a simple rhyme like, “See a coin? Save a coin!” and mimic the act of putting a coin in a piggy bank. Your little girl might not understand what this means right now, but just like “Mary had a little lamb,” this could stick with her for life.

Storybooks are another great way to pass on positive financial habits. I recommend Rose Fres Fausto’s The Retelling of the Richest Man in Babylon, which is a story and activity book that teaches kids the basic laws of money. Go through the activities with your daughter—it’s a great reminder to adults just how simple these laws are.

By the time your kids are old enough for kindergarten, they can already have their own bank account. This will be important in terms of teaching them how to save, and teaching them that money should be protected. At this age, kids don’t understand abstract concepts like mobile deposits. So you need to make the lesson stick by having them do tangible interactions.

Bring the kids to the bank and encourage them to hand the money to the teller while making the deposit. Show them the bank book and explain that this money can grow if they leave it in the bank and don’t withdraw anything. Help them understand that these are savings they can someday use to buy a car or go to college.

Once your kids are in grade school, you can build upon these financial fundamentals by setting mid-term goals—the kind that requires a bit of discipline and teaches sacrifice. For example, if your child wants to buy a bike, explain that she needs to set her allowance aside for a few weeks in order to afford it. To boost her motivation, you can track progress with a visual graph.

Bringing the kids when you do the groceries offers great opportunities to teach smart financial decision-making. For example, you can compare several brands of cereal, and show that the imported ones taste just like locally made ones—but costs twice as much. And that’s why you won’t buy it. When your kids are older, you can give them a budget and a grocery list, then divide and conquer supermarket duties.

Introducing the benefits of charity and tithing is also a good way to teach healthy money habits. Encourage your kids to donate part of their allowance to a charity or non-profit. You can also volunteer your time as a family, or hold a birthday party in an orphanage. Doing charity work at a young age develops the core value of sharing their wealth to others in need, while teaching them to appreciate the material goods they have. Tithing also teaches them about stewardship and that money is really the Lord’s — they are merely managers. Teaching kids the true purpose of money is a great way for them to see and appreciate its real value.

For these strategies to be effective, you and your husband need to be good financial role models to your kids. Your words and actions should not contradict each other, especially while your kids are young. For instance, if you tell your daughter she can’t buy a toy because it’s too expensive, and you turn around and buy something for yourself, it sends her the wrong message.

Besides teaching your kids how to save and budget, it’s important to pass on a healthy attitude towards money. Giving the impression that you’re struggling to feed the family can instill a fear of money in young kids. Avoid sighing when you open your credit card bill or complaining when you take your wallet out to pay for something. Choose your words carefully. Emphasize that when used carefully, money can be a valuable tool to a good life.

It’s never too early to start teaching kids the value of money, and I’m glad you and your husband are already thinking of how best to do this. I’m confident that you will do a fine job in raising money-smart kids.

“Train up a child in the way he should go; even when he is old he will not depart from it.”—Proverbs 22:6, ESV

Get both my books at a discount bundles! Instead of P 1,100 for both books, you can now get it at only P900 with free shipping for Metro Manila (add P100 for provincial address).

Here’s how you can order:

1) Pay the amount via BPI 0249-1113-09 or BDO 006440069496.

2) Take a screen shot of the deposit slip or transaction slip.

3) Email the screen shot to [email protected] along with your complete address and contact number. Indicate in the email if you want the books autograph.

This offer is only until August 7, 2015.

It’s summertime! A lot of students heaved a big sigh of relief after taking their final exams. With the stress from waking up early, doing homework, and following rigid schedules taken out, parents and kids now look forward to enjoying the summer. This is also the time when family members can bond in a more relaxed atmosphere.

Family members are now choosing what activities to do together. Arts and crafts may be enjoyed together if you’re all into it. Other activities include swimming, basketball, tennis, taekwondo, cooking, dancing, singing, theater and many more.

Travelling together is one of the top family bonding activities during summer. This may be a trip to your hometown, or your favorite local spots like Baguio, Boracay, Batangas, Tagaytay. If you have enough budget, you go out of the country. Holy Week is Hong Kong week for a lot of Filipinos. Recently, there has been an increase in the number of Filipinos visiting other nearby Asian countries like Cambodia, Vietnam, Korea, Thailand, Indonesia.  If you have more time and money to spare, you go farther like US, Europe, etc.

These trips allow you to bond with your family members. Spending entire days and weeks together in one room enables you to learn more about each other. You will be surprised that your family members’ interests have already evolved.

Great bonding moments allow you to form stronger family ties.  It is very important to know what each family member desires. This is the only way you can support each other’s dreams. Engaging in meaningful conversation is key. Most of the time parents would ask about their children’s studies and this topic is not always pleasant especially for those whose kids go to very competitive schools.  But you still have to discuss it because you should know what’s happening in each other’s life.

Another topic that’s usually taboo among family members is money. Somehow, we are not very comfortable talking about it for various reasons. Some parents may have grown up not discussing it with their own parents. It may be an emotionally charged topic. Some parents may not want to burden their children with money matters so they just pretend that money is not a problem even if it is. Others just don’t think their children are ready to discuss it.

But the truth is money is an inevitable topic. Everybody needs money and everybody needs it everyday in all stages of life. So why not be the one to teach it to your children? Talk about money as a family.  Financial Literacy is not just a regular skill that can be taught outside of the home. It is a value system. So come and learn how to talk about money as a family. Book your family’s journey to Financial Happiness.

Attend FQ: A WORKSHOP ON FAMILY FINANCE on April 27, 2013 Saturday at the SeameoInnotech, Commonwealth Ave. (near UP Ayala Technohub), 1:00 – 5:30 pm. This could turn out to be one of your most memorable summer bonding moments as you finally open up this personal and essential topic.

This is not your typical Personal Finance talk because you’re going to be with your entire family. You will hear and learn from both the parents and the children of the Fausto Family as they share their experiences on how they discuss money in a happy atmosphere.  You will learn the following skills:

–          set your goals as a family

–          raise your children to have high FQ (Financial Intelligence Quotient)

–          include money talk in your romantic couple time without the stress

–          align your core values with what you do with money

–          make saving a habit

–          invest according to your personality

–          stay within your budget

–          other family finance matters

Marvin, the father, has an extensive experience in the finance industry spanning 30 years. He was the founding president of the Fund Managers’ Association of the Philippines and president of the Trust Association of the Philippines in 2009 – 2010. He is currently the Chief Investment Officer of the country’s largest bank.

Rose, the mother, was an investment banker before she decided to be full time homemaker. A couple of years ago she wrote a book on parenting entitled Raising Pinoy Boys and the favorite chapter among readers turned out to be Chapter 6 Money Matters. Today she writes a column for PhilStar.com entitled Raising Children with High FQ and is a speaker on parenting and financial literacy.

Martin, oldest son, is now a young professional who’s a brand assistant at a manufacturing company. Enrique, second son, is a college sophomore taking up Management Engineering, and Anton, youngest son, is a high school junior, both at the Ateneo de Manila University.

All three sons have been savers and investors since they were very young. They have also been speakers in Financial Literacy workshops for the youth.

To reserve your slot,send email to [email protected] or text 0917-5395770. Tickets are at P500/head, inclusive of snack.

So before you book that summer vacation, book your family’s journey to Financial Happiness now and form a stronger bond with your family!

I’m currently preparing my talk for ‘Finance for Newlyweds’ for the Shangri-La BridalFair. My preparation made me remember a lot of financial mistakes we did in our 20+ years of marriage and it is only the grace of God that we survived those trials.

I thought about a lot of marriage breaking up and it seems that annulments have been increasing in the Philippines and has actually been more socially accepted. So why do marriages end? How can a couple who are really in love with each other end up hating each other? How did “till death do us part” become such a cliché?

I have heard many speakers, counselors and even Preachers say that money is the number one cause of separation by a factor of 4:1. While money is definitely a primary concern of many break-ups, there is very little factual data to support such a claim. However, many studies would put money as one of the leading cause along with communication, infidelity, wrong expectation, intimacy and commitment; although not necessarily the number one and by no means a factor of 4:1. Sorry to burst the bubble of some speakers, counselors and Preachers – I would urge them to double-check their facts.

Despite money not being the leading cause, it is definitely a concern for many marriages and can lead to the breaking up of marriages. I am not an expert in marriages and I have no qualms about telling people that I can be clueless as to keeping a ‘perfect’ marriage, just ask my wife! However, after two decades of being together, my wife and I managed to survive the many challenges in our marriage and most of those challenges are financial in nature. By God’s grace, I think our union will survive in the next 20 or so years.

Here are some suggestion married couples can consider with regards to finances in their marriage:

1) Communicate & be transparent – I find it disturbing that many couples are unaware of each others finances. Even the law acknowledges that a marriage brings union, including their finances and made provisions for conjugal properties. Bereft of any pre-nuptial agreement, a marriage solidifies the finances and everything as now co-owned. Statement of income should likewise be transparent; many problems erupt from false assumption. A wife might be yearning for better family lifestyle thinking that the husband’s income can sustain, only to be dismayed that it can’t. By being transparent and communicating properly, expectations can be managed.

2) Plan, plan, plan. Preparing a budget and sticking to one is definitely a conjugal exercise. I highly recommend that a couple sit down and discuss their budgets, how to disperse income and what to prioritize with their limited resources. A couple must agree on the budget and once a budget is set, they must respect each other by be faithful to the budget. Of course, some flexibility should be exercised as well.

3) Practice family financial planning.  Set up an emergency fund. Think long term — save & invest for the future. Buy life insurance (this really brings peace of mind). Prepare for retirement. Avoid getting in debt and if you need to take a loan like home loan, talk about it and get counsel first.

4) Practice stewardship. Many issues arise if couples don’t practice stewardship. They need to be responsible and accountable to each other and most especially, to the Lord.

5) Learn from other couples. This is not just about money management, but about marriage in general. Have mentors for your marriage and please chose those with a good track record for obvious reasons. You don’t need to learn by experience because it is way too risky to experiment with your marriage.

And here’s my most cherished tip for married couples, keep the Lord in the center of the marriage and everything will turn out great. “If they obey and serve him, they will spend the rest of their days in prosperity and their years in contentment.” – Job 26:11, NIV