Teaching youth how to manage money
9 December, 2007
Youngsters should be taught financial skills before
embarking on their careers.
Youngsters should be taught the value of money before they join the
workforce, writes NURJEHAN MOHAMED.
NUR Shafiqa Abdul Aziz, 20, a mass communications student at Monash
University Malaysia, is your typical college student.
She gets a monthly allowance from her parents which is mostly used up by the
end of the month.
Although she does not go shopping or on outings often, she spends a lot on
food as she does not cook her own meals at the hostel.
And when she eats out, she tends to go for fast food outlets and Sushi King
rather than food stalls.
However, she does make an effort to keep aside at least a third for a rainy
Even though she gets the same allowance as her college-going brother, she
finds herself spending more than he does. And he treats her to lunch and dinner.
“I withdraw what should be enough for a week but often end up broke within a
few days,” she says.
Nur Shafiqa knows her spending habits are unhealthy.
Although her parents have taught Nur Shafiqa about money management, she
would still be grateful for advice on her changing situation now.
Certified financial coach and Abacus Advisory Sdn Bhd founder and chief
executive officer Carol Yip says it is important for youngsters to be taught
good money habits before they start working.
“There is no subject dealing specifically with money, outside of finance or
economics courses,” says Yip, who recently presented a talk to the Monash Alumni
Group on the link between personalities and money habits (see story on H3).
She adds that you require skills to manage your money, just like you need
skills to handle your job.
A number of parents take the time to teach their children the value of money
— how to save for a rainy day and how to track their expenses — but many do not.
The children of the latter would then learn from either their friends or by
watching how their parents deal with their finances.
Yip, who also recently published a book entitled Smart Money-User, says that
generally, tertiary students are more likely to spend rather than earn and save
A simple basic need such as eating becomes a question of want when you
consider the enjoyment you get out of your meal.
For instance, would you choose to eat at a coffee shop or a food stall, which
would not have air-conditioning, or at a restaurant which had a wider choice of
food and air-conditioning?
“A lot of wants have become needs, especially for the younger generation,”
says Yip, citing trendy clothes and owning the latest mobile phones as examples.
When these needs are not met, students may suffer a blow to their
self-esteem. This is an example of not being money-wise.
Money habits tie in with the goals of the individual — if your aim is to have
fun and make friends, then you would find a lot of your money is spent on
entertainment and going out.
Although you should not let making money be your only goal in life, you
should also avoid getting into a difficult financial situation.
When you do not have money, it leads to emotional stress, loss in reputation
and self-esteem, as well as relationship problems.
Your financial habits also have to do with your experience with money from
young — if your parents taught you the virtues of saving and of other income
generators, it wouldn’t be another foreign concept to learn when you start
The way you spend would also be dependent on the different roles that you
play — you could be a student, a daughter or son and a friend at the same time
and each role would require you to spend money in a certain way.
“Students need to learn to look for substitutes — whether it is cheaper
alternatives or delaying gratification (saving up for a specific purchase at a
later time),” says Yip.
If you are not able to spend within your means as a student, you would find
it much harder to cope when you enter the working world and have to start
fending for yourself.
“Being money-wise is about being knowledgeable — you are responsible for your
own decisions and have to know that mistakes are costly,” says Yip.
For example, if you take up a course not suited to you at tertiary level
resulting in you being unable to find a job later, it would have been money and
time wasted on studying something irrelevant to you.
Asking the right person about financial matters is also a good move but this
could be tricky as there would be the question of who the correct individual is.
“Money is a personal thing — you do not go round asking people what their
salary is or how much money they have,” says Yip.
This is why she firmly believes that university students should be introduced
to a career development programme that exposes them to the real world. The
course should allow them to meet professionals to get a better idea of what
working life is like, and which teaches them life skills including ways to
manage their money.
This is something that may become a reality sooner than later with such a
course being introduced to public university students next year (see story on
Practical advice from Yip includes putting aside 20 to 30 per cent of what
you get for times when your funds are running low, and learning to adjust your
spending and sacrificing certain things such as dining at expensive cafes all
You should also track expenses by noting down what you spend on every day.
At the end of the month, you should look at your cash flow critically and
think about whether you are spending towards achieving your goals as a student
and a young adult coming out to work.
More importantly, how much do you have left at the end of the month and can
you improve on it?
It’s a matter of balance — to spend within your means and save enough for
your life goals.
“Whether you are rich or poor, the key is being able to handle the money that
you have,” says Yip.
This type of pragmatic help would be appreciated by students such as Nur
Shafiqa who admits that she is aware of the need to budget — “spend only on the
essentials and save the rest” — although she is not quite up to that standard