A couple of years back, my son came to me and said, “Papa, I want to buy a Jaguar”. He meant the car, by the way. He was and is still fascinated with the cars, and by Jaguar specifically.
The car is clearly not on my list of priorities, but if my son wants it, I am the last one to discourage him. At the same time, this was a great opportunity for him to understand few basic lessons in life.
Lesson 1: Set goals in life. Even if the goals look ridiculously high, do not worry. Don’t be discouraged. Try. Goals are highly motivating.
I said, “Why not? But do you know how much it costs to buy one?” He obviously had not thought of this. So I asked him to go and find it out. Few days later, he came to me and said, it would cost around Rs. 1 crore.
Lesson 2: Without assigning an amount to a goal, it just remains a dream.
My next question to him was on how to accumulate so much money. He started thinking on this. A few days later, we were going to his school and he asks me how much money do I earn each month. I told him the number. He was surprised and expressed a bit of disappointment, as it would take a long before he can get his dream car considering my earning. My response to that was – actually it might take longer than that since he considered the total income without adjusting for the expenses.
Lesson 3: It is not the income, but the savings that help you reach goals.
While he was getting disappointed, I did not want him to give up. So I suggested that anyway the car was to be purchased for him and he can drive only after he is 18 years old. So, he had nine more years to go (he was 9 years old when the discussion took place). That was enough time to accumulate the money required for the goal.
Lesson 4: Assigning value to a goal is not enough; you must also set a timeline.
He kept thinking. Then one day he came to me and said, “Papa, you know, when you go to a shop to buy something and two similar things are available, buy the one that is cheaper.” I asked him to explain it further. He said, “See, if there are two varieties of orange juice, both almost similar quality, but one is priced at Rs. 12 and the other at Rs. 15; you should buy the one that is priced at Rs. 12.” I said, “Ok, but how does it help.” He said, “It is very simple. You know on each pack of orange juice, you save Rs. 3. And that additional saving would help us buying the Jaguar faster.”
Lesson 5: Every drop makes an ocean. Small amounts saved regularly, can help one reach impossible goals.
Nobody had taught him this. It just occurred to him as he kept thinking about his dream car – the Jaguar.
My son taught me some valuable lessons:
1. Personal finance is not a difficult subject. It is common sense. After all, even a kid can understand it.
2. Setting goals and working towards achievement is highly motivating. Once you really want something, the mind starts to think of the solutions and as Paulo Koelho would have loved to add: “And when you want something, all the Universe conspires in helping you to achieve it”. Well, Shahrukh Khan was not the first to say this when he uttered a similar line in “Om Shanti Om”.
These are small opportunities in life for a child to pick up some valuable lessons. It is always the responsibility of a parent to explore and exploit such opportunities to teach some valuable life lessons.