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3 Things Our 10-Year Old Selves Could Teach Us About Financial Planning

You know you are not managing your money well when you can learn lessons from your 10-year old self.


As we grow older, we are supposed to grow wiser. At least, that’s what we hope will happen…especially after what happened last Friday night.

Reality is completely opposite and most of us never truly mature. Younger people learn faster, are more open to technology and are by nature, more inquisitive. And while we like to think that being older has its benefits like making us more responsible and thoughtful, this is not necessarily true as well, not when it comes to finance.

A recent report published by the Credit Bureau Singapore revealed that there were a total of 85,352 people who have outstanding unsecured debt (i.e. credit card debt, personal loan debt) in the first half of 2015. This represents 5% of our total population. In addition, the amount of total overdue balances also rose.

What is worrying is that this has been an upward trend since 2011.

We feel it is worth taking some financial planning lessons from our 10-year old selves.

1. Having The Money In Hand Before Buying A Big-Ticket Item

When we were young, we did not have access to credit, and needed to have the money in hand before we could afford any big-ticket items. This meant that we had to scrimp and save out $2 per day (this was 18 years ago) allowance for 10 straight days before heading over to the 7-11 to buy the $10 Digimon/ Tamagotchi set. Sure, we always had friends whose parents gave them money outright to buy those toys, but the premise remains the same, we had to have the money in hand.

Somehow, not having a credit card in those days wasn’t a problem. We simply worked with what we have. We feel this is relevant to our older selves – as witnessed by the steady uptick in our population’s unsecured debt level. Left unchecked, this habit could lead many people to financial ruin.

At the end of the day, we must understand that if we cannot afford to buy something, it’s perfectly fine saving up to buy it or realising our lives will not be greatly impacted without it.

2. We Meticulously Ration Our Spending Each Day

With an allowance of $2 per day, walking in to a McDonald outlet and ordering the McSpicy Double Meal for $5.50 just wasn’t going to work. Common sense prevailed for our younger selves. There simply was no way we could afford it with the daily budget we have.

We knew exactly where our daily $2 allowance goes. $0.40 would go to ice-cream before school. $0.8 would be allocated to recess break – $0.50 on food and $0.30 on a drink. $0.40 to an after school drink, and the remaining $0.60 to be saved or spent to replace six country erasers we lost in a “pushing” game.

It may not be the best or smartest usage of money but hey, at least we knew where our money was going and made sure we spent within our means. That is a lot better than about 80% of us adults today.

3. We lent And We Returned

There were days where we lent money to our friends when he or she forget wallets at home and had to pay for something else in school. Or maybe they had to buy a $0.50 exercise book for that day after a teacher got mad with their poor handwriting and flung the book out of class and it landed in the school pond…yes…

Somehow, these debts were never forgotten and usually promptly returned the next day. Likewise, when we needed to borrow money from our friends, it was always returned swiftly.

For some reason, as we grew older and wiser, borrowed money took longer to be repaid, if ever at all. It is strange to think that while our 10-year old selves never forget to repay a $0.50 debt, our adult selves struggle to repay borrowed money.

Were we smarter with our personal finance back then? How can parents teach their children the value of money when many can’t manage it well ourselves? Share with us your views on Facebook.

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