Mind your spending at MoneyTree AsiaPac - Developing Tomorrow’s Financial Geniuses

2009/07/29

Angertdev Singh, 14, Petaling Jaya; Lam Xin Ning, 14, Kuala Lumpur

“I want an iPhone papa!” Michael Reyes recounted, as he told us of a five-year-old’s demands that he had overheard.

“Children nowadays are creating their own problems spending lavishly on branded items. Why choose an expensive phone when a cheaper one would do just as well?”

As the director of Money Tree Asia Pacific Limited, Michael Reyes knows what he is talking about.

“Basically teens buy things just to show off. But if you want to impress your friend, there are easier ways. Buy your friend a cup of Grande Starbucks coffee instead of impressing them with your phone. Your friend will be happy, and it will only cost you a mere RM16.95. Compare that with spending RM2,450 for a phone!”

Financial literacy for youngsters is what Money Tree is all about.
“We were intrigued when we found out that many people are facing financial problems,” Reyes said. He and his partners felt that one solution was to start educating the young on how to spend their money wisely. So Money Tree comes up with creative financial challenges for children aged between six and 21.

Its programmes focus on teaching school-going kids and young adults how to manage their money effectively. The underlying message is that money is not everything but everything requires money. That is why it pays not to be financially challenged.

“For teenagers, talking about money is boring, but spending is so much fun,” said Reyes. At every training session, he and his team lay down a few cold, hard facts. One of the scariest is that by the age of 65, about 90 per cent of us will be broke. So, in a class of 40 students, only two will actually survive.

So what is the smart and effective way of keeping your wallet heavy, we asked. “Always think whether you really need what you buy or not,” he said. “Is it a necessity for you? Does it help you in your work or make your life easier? Or do you just want it to show off?”

According to Reyes, teenagers often get what they want and not really what they need.

One way to keep your focus is to make a financial plan.

“For instance,” he said, “have files on what you want to spend on. Have a food file, a stationery file and so on. Someone else’s necessities may not necessarily be your necessity.”

He went on to explain: “Frankly, I don’t need a car. After some draw ups and plans, I realised that buying a car actually requires a large sum of money which I could save if I didn’t get one. Getting a car includes maintenance fees, petrol fees, toll charges. Then I started planning on how much I would spend if I took a cab to and from my office daily.

“I figured out that cabs are much cheaper. People may wonder how I live without a car. Actually, it’s simple. By making sure my work place is just a kilometre from my house, I save lots of cab fare. If I didn’t do my research properly, I would unconsciously waste this money. This practice is called consistent money management.”

So what do teens need to know about saving and investing?

“Teens should learn more about investment before investing. Save your money in the bank first and when you have enough for full investment, then invest,” said Reyes.

Money Tree teaches us that we should divide our savings into five sections: emergencies, investments, self-development, play and charity.

“Never use money from one section to cover another,” stressed Reyes. “Don’t use your self-development fund to pay for your play or even use your play fund to pay for emergencies. Emergencies will happen and you have to be prepared.”

Reyes’ advice is save early and save often.

And the key to good planning is: “Always buy what you need, not what you want.”

If you want to know how to manage your money wisely, visit www.moneytree.my .