By PATSY KAM

MONEY doesn't grow on trees. Tell us something we don't already know, right? But if you look at how some children are spending their parents' money, you'd think otherwise.

The 'what I want, I get' culture persists today and if something gets spoilt or stolen, no problem, just buy another one.

How did we become such an irresponsible society?

'Much of it has to do with the way parents bring up their children. Some feel compelled to provide what they themselves couldn't have when they were growing up. Another reason is because in many modern families today, both parents work and spend too much time looking for money. And they end up compensating time with money by spending on their kids,' rationalises Brandon Liew, CEO of Money Tree Sdn Bhd. The company is a subsidiary of Money Tree Asia Pacific Ltd, a franchise originating from United States that teaches children money management.

'We spend most of our adult life worrying about money and it's not even taught in schools here, unless you mean accounting, which doesn't quite teach children the value of money. Obviously, there's a gap here that needs to be filled,' adds Liew.

Which is why one of the best gifts to impart to your teenager right now is basic money management sensibilities. Young people need to learn how to be financially sound, as they're just one step away from adulthood which opens the door to the working world.

And, one of the strongest messages to hit home is the fact that 90% of people above the age of 65 end up broke. It seems harsh to deliver such hard truths to teens but the fact is, they need to realise the importance of saving and investing correctly to tide them over in later years.

One of the foremost questions teenagers need to ask themselves (and this doesn't just apply to teens) is whether they really need something, or is it merely to satisfy a desire to show off or be trendy. For the most part, it is usually the latter; to inculcate smarter buying habits, one should always weigh factors, such as quality, against price as well as 'need' versus 'want', and wait (at least a week) before making the purchase. During the waiting period, there could be a sale or discount offered which cuts your expenditure and more crucially, reduce impulse buys.

Teenagers also need to learn the difference between assets and liabilities. For instance, buying a car would appear that you've acquired an asset but in fact, it's a liability as it depreciates as soon as it's driven out of the showroom.

By being able to distinguish what's an asset (house, shares, mutual funds) and what's a liability (loans, credit card debts), your child will be able to discern that it's obviously more cost-effective to accumulate assets.

A quick lesson in economics about demand and supply as well as a brief look at the various ways one can invest and make money grow often prove to be eye-openers to teenagers. This, along with other financial nuggets, were imparted during a Money Wise Apprentice camp for teenagers organised by Astro and Money Tree recently, where the teens learnt about financial literacy in a fun and interactive manner.

The teens were put through various interactive scenarios. They were given credit cards, cash, investments and put through a 'mini economy' in which earning, spending, saving and investing were part of the programme.

'The objective is to equip them with the tools to manage their money better so that they can discover what suits them best next time, stopping short of technicalities like how to pick up shares or buy mutual funds,' adds Liew.

In fact, even primary schoolchildren can learn about money although it's a little more challenging teaching such young kids as they have shorter attention span, limited vocabulary and are not so mature at that stage.

Money Tree has programmes for children as young as five years old onwards, and more extensive programmes can extend up to a few months, including those for young entrepreneurs aged 19 and above.

'By equipping teenagers with knowledge, we're hoping that they will learn the value of saving, and start young. It's always easier to instil good financial habits and foster a shrewd mindset rather than having to teach someone how to shed a bad habit later,' says Liew.

Most of the time, the problem begins when teenagers have a limitless supply of cash when they are young and then, when they join the workforce later, they spend money the same way, and find themselves getting into a financial rut.

'If their parents cut them off, only two things can happen: they will either cut down on spending (which is highly unlikely), or they'll chalk up credit card bills which cannot be paid,' explains Liew.

Ironically, these are basic financial lessons which even some adults have not learnt.

Every child knows how to save but most of it goes towards buying a toy or gadget at the end. But it takes a savvy teen to take it one step further and invest that same amount saved.

'Before they are old enough to invest, they need to know the different risks and returns involved, be it mutual funds, fixed deposits, real estate, futures, stocks or shares. They can put aside as little as a few hundred ringgit to start the ball rolling.'