Lessons About Money
Many middle-to-upper class Indian parents (about 55%), pay for their children’s education, cell phone bills, cars and let them live at home rent-free. They prefer to make financial decisions on behalf of their children instead of discussing things openly and empowering them toward a financially independent future. That’s not how my parents, particularly my mother, did things. One of her biggest takeaways from reading parenting books was the importance of teaching children about the value and management of money. This education was something her parents never gave her, so she decided she would break the cycle with my brother and me. Here are some things she made us practice that helped shape our relationship with money as adults:
#1: There’s your money and mine, no ours
It was never ‘our’ money; it was mine or yours. From the age of 6, we were given monthly pocket money, which we had to keep safe in our own wallets. Asking for anything above that was a big ‘no-no’. So, if I took a taxi home from school instead of taking the school bus one day, I’d have to walk home for the last week of the month, when my allowance ran out. This taught me how to budget early on. By the age of 10, we had our own bank accounts, where we kept money that was given to us (on birthdays and festivals), as well as any other savings we wanted to put away. Thanks to this, I knew more about personal banking by 15 than anyone else my age.
Using semantics to distinguish between what money was mine and what belonged to my parents established at a young age that we didn’t have unlimited access to our parents’ money. It not only made us accountable and responsible for what was ours, but it also made us feel empowered and independent. Even today, we split all expenses when we do things as a group. All our family holidays have Splitwise groups; our parents don’t pay for everything by default.
#2: Earn your keep and pay your dues
Growing up, no money that we got from our parents came for free, not even our pocket money. We had to earn it by doing chores around the house. By the age of 15, we were warned that pocket money was going to dry up as soon as I turned 18 and by 21, staying at home would no longer be free. When the time came, we were prepared to find jobs to cover our expenses. Exceptions were only made if the job was an unpaid internship or a volunteering program, in which case we’d get a ‘stipend’ from our parents. At 21, we had to start paying a nominal amount as rent.
As a teenager, I would sometimes resent my mother for this particular lesson. As an adult, I couldn’t be more grateful. I learned to DO more to get more, instead of feeling entitled to what should be mine.
#3: Always divide your money into three
Even back when my pocket money was Rs. 100, I couldn’t use it all. It had to be divided into Rs. 33, Rs. 33 and Rs. 34. A third of whatever pocket money I got was put in the bank to save for any big purchase. At the age of 10, it was a Gameboy, at 15 it was a iPod and at 17, it was a trip to Goa. Another third went towards the things I wanted in the short-term – a new board game at age 8, a nice pair of sneakers at 15 and a shopping haul at 17. The remaining third I could use for day-to-day expenses and whatever else I wanted. By the time I was 18, saving was second nature to me.
Even today, for every Rs. 10,000 I earn, I immediately think in terms of 3,300, 3,300 and 3,400 – one part gets stashed for a long to medium-term goal, one for short term and I only give myself access to the remaining for short term treats and expenses. While this was the simplest lesson, it not only gave me independence, it also gave me resilience! It’s what allowed me to quit my 9-5 in the middle of a pandemic to do something I felt truly passionate about.
#4: Know the difference between a loan and a gift
If there was a time when I needed a larger amount of money- like an international holiday– I’d have to ‘pitch’ the expense to my parents. I had to list down why it was a worthy expense, provide an expense break-up, plan where and how I’d spend it, etc. They’d then decide if the expense would be a gift from my parents or a loan that I’d have to find a way to pay back. If they weren’t too keen on it instead of saying ‘no’, they’d say it would be a loan and then it would be my decision to go or not. Usually, it would be a gift.
Pitching these expenses made me plan and research every tiny thing, compare costs, weigh options, which ensured that I went into every experience with my eyes wide open. Now, I’m a pro at getting great deals and bargains. Plus, I’d never get more than the amount I pitched so I learned to budget on holidays, understand exchange rates, etc. very early on.
Despite these lessons and rules, my childhood was actually very comfortable. Mainly because these lessons were activity-oriented rather than something we were ‘told’ to do. They were enjoyable, intriguing and ultimately, rewarding.
Sometimes, I can have financial FOMO, especially when some of my peers seem to have endless access to funds but the pride, strength and comfort I feel about my financial future outstrips the FOMO. I feel grateful for my mother since this was hard for her as well. What parent doesn’t want to dote on their child? But, she put those feelings aside to ensure we have a financial inheritance that was more meaningful than something that could simply be put in a will.