Is it important to teach balance between saving and spending?

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I’m a 75-year-old father, and my wife and I are now enjoying our retirement with comfortable savings. When I look back, I’m content that we worked hard yet afforded the things we liked — and still saved enough.

In short, it was a balance of the yin and yang: the right equilibrium between hard work and enjoying life. It’s no coincidence that we are Balancers — parents who seek to achieve exactly this in their lives and for their children.

Most importantly, I’m glad we’ve passed on some important money lessons focusing on this balance to our son. Now in his mid-thirties, he has a comfortable lifestyle and decent savings.

Could other Balancer parents achieve the same? Why not?

1. Save

When my son turned 3, I got him his first piggy bank. He was thrilled by the sound of coins clanking against the plastic. Therein lay his first money lesson: the more money there was in it, the less noise it would make. While the sound of its emptiness may be exciting, it actually is an alarm bell!

From then on, he religiously deposited coins into his piggy bank. It became a habit that stuck with him for life.

But of course, balance is key. We did remind him not to deprive himself of the simple joys in life. We encouraged him to use some of the money to treat himself to erasers or sweets when we brought him out. Save, but live as well – that’s our motto as Balancers.

2. Investing

When my son was 6, I taught him his first lesson about ‘interest’. I told him that for every 10 dollars he saved out of his pocket money, I would add a dollar to it.

He caught on to the idea quickly, saving whenever he could just so I would add to his growing stash. I helped to fund a number of things in his teen years — and he also started investing early in his life.

Much to my surprise, his appetite for risk is far greater than mine. I have always been on the conservative side, but he’s been educating me on the need to take calculated risks since he was a young adult.

3. You don’t always see your money

Also when he was 6, I taught my son what a bank account is. He’d been asking where we put all the coins he’d collected when the piggy bank got full, and where all the festive hong baos that he received went.

I explained, “you may not see it, but it’s there and it grows. And the longer you don’t see it, the longer it has to grow.”

Of course, he didn’t understand the need to put his savings into his bank account immediately. An expert at negotiation even at 6, he would come up with creative arguments of why he would need to use some of the money before the rest were deposited and forgotten about.

And we never insisted that he saved all of it; for us, we view that life isn’t just about money. When he really wanted something, he got to buy it with the money that we let him keep.

Needless to say, now he sets aside money for fixed deposits and other investments that bring him passive income. We may have started him on this, but he’s added his two cents to it — well, definitely more, but that’s precisely what we wanted him to do!

4. It all adds up

As a natural math whiz, numbers always made sense to my son. So I used real-life examples to teach him to understand expenses by adding them up — what better way to learn than real-life contexts anyway?

For example, when we had our occasional McDonald’s treat, I would ask him, “How much would you spend in a week if you buy one Happy Meal a day?” And he would calculate that. Then I’d ask him how much that would be in a month, in a year, and so on.

Having him understand that “just one” thing could add up to “a lot” in terms of expenses was an important lesson for him and me, and is one that still applies today. By looking at his expenses like this, he’s managed to make significant savings! In fact, I think he does it better than me.

5. Money is hard to earn

My son first started earning his own money when he was in junior college. He would give tuition for some extra cash to fund concerts, movies and whatever else he wanted. Later, he took on odd jobs in warehouses until he entered university to fund his holidays with his friends.

We’ve always encouraged him to get the best of both worlds; to learn what it’s like to earn money (even if it is just one aspect in the overall scheme of life), but also to build travel and cultural experiences.

To us, money spent on such things are investments too. We’d funded his 3-month trip to Europe as a gift upon his graduation — half of it anyway. He knew that it was our hard-earned money, and insisted on paying for half.

That, to me, was already an indication of our money parenting success. He had learnt the value of money. He had also learnt the importance of spending money on things that are worth it.

Money parenting is a journey and it doesn’t only go one way, I’ve found. Once, it was me teaching him; today, he gives me lessons on retirement savings, insurance policies, investing, what I should do with my property and so on. I like how there is a nice mix between the early lessons I have taught him and the things that he has discovered for himself along the course of his life.

I guess that’s what money parenting has been all about for us as Balancers: giving our son a solid foundation that he can build on as he goes along, and guiding him without being overbearing.

We strived to teach our son about the value of money and how best to use it. Knowing that our son has achieved this balance gives us the assurance that he is well prepared for the rest of his life.