We often hear about vulnerabilities of parents when come to retirement planning. Children are encouraged to top up their parents’ Central Provident Fund (CPF) accounts so that they could draw down more in their silver years. This is well and good. As a reversal, parents could help their children plan for their own future and then retire well enough when it is their turns. This is one of the parenting roles in bringing up our kids to be self-sufficient and not to depend on the next generation after them. Instead of looking back on their children for financial support, we could work towards looking after ourselves even in our old age when come to financial adequacy.
One of the most important things we ought to do is to encourage our kids to save. Always save some money first and not to spend every single cent that comes your way. Spending on credit knowing that you could have difficulty paying later would not be encouraged. When one is still young, getting into spending on credit too soon is not wise. Money does not drop from the sky. Consider using debit card instead of credit card.
The next thing is to teach our kids about investing the money saved. Having money sitting in the savings account is not advisable since it pays very low interest rate. Look out for safer investments and recommend these investment ideas to them. One idea is putting money into the Singapore Savings Bond. Our children is clueless on investments when they are starting out working (if they are not skilled in financial matters).
So our kids save, then invest the savings in safer investments. Do not spend on credit. This is the way to sustainability living with regard to financial matters that is balanced without going into excesses. By starting early on financial planning, our children have a longer period to accumulate wealth until it is their retirement age.
The next things we could do is to encourage our children to buy insurance when they are still young and healthy. Consider buying whole life insurance with cash bonus, living assurance with cash bonus, integrated shield plan for hospitalisation insurance.
As parents, we must set a living example of prudent saving and spending, and wise investing. We have to walk the talk. Otherwise what we say will be hollow and hypocritical to our children.
Copyright © 2018, limkimtong for Living Investment
The material presented is intended to be general and written in layman’s language as much as it is possible. The author shall not be liable for any direct or consequential loss arising from any use of material written. Please seek professional advice from your financial advisor or financial institutions on material written covering financial matters.