Today’s knights need financial saving as well
‘‘It is a truth universally acknowledged that a single man in possession of a good fortune must be in want of a wife.’’
So wrote Jane Austen at the start of her ever popular novel, Pride and Prejudice, imparting with a lovely irony the hopes and aspirations of the would-be wives occupying 18th century English drawing rooms.
But in modern, increasingly urban New Zealand, a single young person of either gender should be universally acknowledged to be in want of a wellearning other half.
It has long been the clarion cry of women financial advisers that women should not rely on a ‘‘white knight’’ to come along and save their financial lives.
I’m a modern man and have always nodded dutifully at the concept but in an increasingly ‘‘user-pays’’ world in which house prices in our cities continue to distance themselves from incomes, the whole white knight rejection thing feels a little 20th century.
Because it’s not just the damsels who are in need of saving. The knights need solvent damsels with their own horses.
I’ve been musing on this topic since the upcoming Money Week (September 1-7) will no doubt find me asked to talk about the importance of teaching kids prudent saving and spending habits during their early years.
I’ll produce a 10-step list aimed at producing money-savvy kids which is all about preparing them to stand on their own two feet. It’ll read something like this: 1. Give them pocket money but force them to save half towards their retirement so they are aware of their mortality from early on 2. Make them earn their money by doing housework. It’s never too early to learn that everything can be monetised, even family responsibilities 3. If they want something they haven’t saved for, lend them the money at a high rate of interest. They’ll never fall prey to pay-day lenders after that 4. Sign them up to KiwiSaver and once a year read the financial statements of their scheme with them 5. Play them DVDs of US investment guru Warren Buffett’s AGM presentations 6. Encourage them to operate a small business through monthly lemonade stands or the like 7. Teach them about insurance by buying them some of Asteron’s child life insurance and discussing with them all the horrible diseases they could contract 8. Criticise their purchase choices so they learn to associate spend- ing rather than saving with evil 9. Post wall charts of how fast you are paying down your mortgage 10. Use cash when paying for goods so children get to know its value.
Every point is common advice you’d be given by money writers anywhere and it strikes me as being, in its way, as romance-free and cold-blooded as the education in Jane Austen’s day of women of marriageable status.
Both aim to secure financial prosperity.
Of course there’s a kernel of truth in every point raised in my list (OK perhaps not number seven), and children do need progressively exposing to the adult world, including how the family functions financially. But I would argue that parents should not aim to raise a financially savvy child, but a well-adjusted, well-educated child with a work ethic and the confidence to direct their energies into things they are good at.
Without those things, financial literacy isn’t going to help anyway and the chances of snaring that solvent damsel or knight are much reduced.