Are Tablets & Smartphones Good For Children?

During lunch time, I saw a boy about 7-8 years old in a restaurant, sitting there and playing tablet games. His mom was standing by his side feeding him his lunch. His eyes were only on the screen of the tablet all the time.

You may not agree with me but I find this scene ugly and heartbreaking.

Many parent let their young children playing with their tablets or smartphones without control. Some children even have their own device at a very young age.

When you go to a restaurant or coffee shop or a wedding dinner nowadays, how frequent can you see children playing games on tablets?

Some parent may find this way perfect to keep their children from disturbing them.

My wife and I share the same view that those tablets and smartphones games are not for young children. However, I believe that many games apps are designed for them.

Even though some parent may argue that there are many "educational" apps for children, I still don't find it right for young children to fix their fragile eyes to the screen everyday.

I don't have a tablet, even though actually I would love to have one. I don't even have a smartphone until my sister gave one to me as a present last year.

Anyway, this does not mean that my kids do not have any exposure to tablet games at all.

I know that sometimes my mom "curi-curi" let her grandchildren playing with her ipad, as she may feel pity for them by not having fun from ipad like many other children have.

I'm alright with this as I know that sooner or later my children will get exposed to it. So I view this as a good way to let them know about ipad. What I do is just to guide them to manage their time spent on ipad.

Luckily so far they are not addicted to it.

Some parent might think that the future is all about internet & smart devices, so we should expose our children early to all these high-tech stuff so that they can gain "advantage" over other children who are not internet or computer savvy.

Some might argue that playing games on tablet or smartphone can help to train children's mental alertness, problem solving skill and finger dexterity.

Personally I don't agree with these ideas. In my view, it can only damage children's eyes, makes them hyperactive, waste their time and negatively affect their social skill as well as parent-children relationship.

Hence, I think we should keep their time on tablet/smartphone as minimal as possible.

To gain advantage on other children, I would put more effort into building good foundation in their attitude, sense of responsibility, sense of love and confidence. It's not to burden them with pressure to get No.1 in class, or attending multiple talent and tuition classes.

Young children will be very happy if you buy them toys or junk food. However, do you notice that the joy is short-lived? What they really need is being recognized, being loved and being accompanied. 

How Much Education Fund To Save For Children?

In financial planning, children's education fund is an important part of it unless you don't wish to have a child, or do not have a child for some reasons.

This education fund is for their tertiary education (pre-U & university/college) when they graduate from secondary schools.

How much should parent save for their children education funds? Is it RM50k, RM200k or RM500k?

Of course this depends very much on which courses and where the children want to study.

Here are some info from StudyMalaysia regarding average tertiary education cost in Malaysia's private colleges & universities.

       Pre-U studies in private education institution

       Bachelor's Degree (Undergraduate) in local private Uni

       Bachelor's Degree in foreign Uni branch

       3+0 in local private college/Uni

       Twinning Degree

       MBA in Public Uni

       Comparison of tuition fee & cost of living

To estimate the tuition fee, I think it is unwise to take the average value as there is 50% chance that the fund may not be enough to a great extent. However, it is also not practical to assume that our children will want to study medicine.

So for me, I will estimate the current pre-U tuition fee at RM25k and degree tuition fee at RM90k. However, there will be some other miscellaneous fees besides tuition fee. I'm not sure how much is it but I'll put in extra RM20k.

It is likely that the child will need extra living expenses as they will stay away from their parent during the study. They need accommodation, food, transport etc. If monthly cost of living for them is RM1000, then 5 years will be RM60k.

The total cost will be RM195k. If we follow the total cost of RM35k per year for Malaysia in the last table above, it will be RM175k for 5 years including pre-U. So it is quite close to my calculation.

Don't forget about inflation as well. How much are the tuition fee and cost of living 10-15 years later? 

I predict that more foreign universities will set up their branch campuses in Malaysia in the future. So this means more competition and hopefully the tuition fee won't increase too much.

     University of Nottingham Malaysia campus

As for cost of living, it will certainly increase at about 3% rate per year. I'll take 30% increase in overall cost in 10 years time.

So the overall cost of tertiary education + cost of living will be RM195k x 130% = RM250k for one child.

If you only have 10 years to prepare for RM250k, you need to save RM1200 a month in an investment that pays consistent 10% return annually, which is not easy at all.

If you plan early even before you have a child, you can save RM600 a month in an investment that makes 5% return annually for 20 years to generate RM250k, which is much easier to achieve.

If your child wants to study abroad, then you are expected to pay much more than that.

If you have more than one child, then there will be more headache...

If you have many children and all of them want to study abroad, then you better pray for scholarships or work til you die, unless you earn big bucks.

Best Investment In Children

If you have kids, do you consider them as an asset or liability?

Before children can earn their own money, parent actually spend a lot of money on them for about 20 years. This is not a small financial burden especially when children pursue tertiary education. I guess most parent will agree.

So, are children a liability to parent?

Nevertheless, some parent treat this as a long term investment. They invest their money for 20 years and hope to get "dividend" monthly from their children when they retire. The more successful the children are, the more "dividend" they can get. So children are an asset to them.

But what if their children do not give them the "dividend" and do not even want to stay with them in the future? Isn't it a risky investment with non-guaranteed return?

I think most people do not think of all these things when they want to have children. Having children is a norm in life like birth - old - ill - death, or work - marry - baby - retire.

In these modern days, it is no more how many children do you want to have, it is how many children can you afford to have.

For most wage-earners, having an extra child can significantly delay their early retirement plan, unless one of the children earns big money at very young age and gives his/her parent handsome pocket money every month.

This is a true story. A professional couple can buy a new proton saga with cash every month with their salary. So I think their parent will surely have their 3 meals & special needs covered every day. Isn't it an example of successful investment in children?

The couple move into a new million dollar house. When being asked whether parent are staying with them, the answer is: I'll go crazy if staying with old fellow...

One old couple are in their late 70s now. They have 2 sons, both were sent to USA for tertiary education in their early 20s. Both are highly educated but do not want to come back, not even every year during new year reunion day.

The old couple invested for 20 years in their children, and get the reward in the form of money, but apparently lose their sons for 50 years. Is it a successful investment?

I'm sure that there are a lot of similar cases around us and I think it will get more common in the future. Perhaps you are one of the many that are involved in such situation.

Should we blame the children? Sometimes their talents are only appreciated by or applicable in other more developed countries. They have much better income & better living there. The children have no choice...

Should we blame the parent? As both parent are busy earning money for a living, the important early bond with their children are largely neglected. So the children tend to "forget" about their parent when they turn adult. But parent are forced to work hard to give their children a better living...

In term of financial planning, it is true that we should maximize our earning potential by earning as much as possible when we are young.

However, we should strike a balance between work and life, especially when we have a spouse or child.

I think children need their parent's accompany the most when they are below 12 years old. The younger they are, the more important the bond is to them.

Some people may say: I work very hard day & night for 10-15 years, then I'll be able to enter semi-retirement or retirement stage and will have plenty of time to be with my children.

However, when the time finally comes, their children will be in secondary school, or even have their own family where friends and work are more important to them.

At this stage, it is difficult to improve the bond between parent and children significantly. For those who have bad relationship with their children up to this stage, it is almost beyond repair.

Thus, parent should spend more quality time with their young children. If you think that you have no enough time, then cut down on your time on TV, online, hobby and even work if you can.

What is the best form of investment in children? Is it tuition class, piano class, swimming class, best school, insurance or educational fund?

I believe that parent will be able to reap more "reward" from time, rather than money invested in their children. If this fundamental bond with children is not established properly, it would probably be a regret for the rest of our lives.

Learn To Save From Young Before It's Too Late

Financial planning should start from very young, there is no doubt about that. 

We can't teach a young child how to earn or invest the money. What they should be taught is very simple - saving.

For me, saving is the most important part in financial planning, and is the easiest to learn. You don't need to have a high IQ to learn about saving. 

Saving skill is learned when we are a small kids, without we realizing it. If we miss the timing, then it may be difficult to save meaningfully in the future.

Nowadays most of our children are very "fortunate". They can get what they want because their parents "love" them very much. Whenever they want anything from a toy to McDonald, their parent will buy for them. Some kids even have a maid to serve them.

Some parents always want to give the best for their children. They don't allow their children to wear old clothes. They throw away old school bag even though it is still usable. They spend money without restriction in front of their children.

If the child grow up in such an environment, I think they can hardly learn about saving. When the child grow up into adulthood, it is likely that he will spend easily on unnecessary or luxury items, such as changing the smartphones every time the new models are released.

Even if you are not poor, you still need to let your young children know that money does not come easily.

It is common for every kids to ask you to buy them any toys they see. If you don't buy for them, sometimes they will cry. If you pity them and buy for them when they start to cry, then you are "finished". 

Children are smart, they learn that when they cry they can get your attention and anything they want. So they will keep on doing the same thing until one day you refuse to fulfill their wishes, they will throw a tantrum on you, screaming, scolding or even beating you, hate you and get angry with you.

So, parent should not let their children "controlling" them.

I believe that if we talk properly or discuss with children above 2-3 years old, they are able understand and accept most situation.

For example, if your child insists to buy a RM50 toy and you are reluctant to buy for him, what will you do? 

Some parent just ignore the child, pull their child away without talking much, some just say "No, lets go", some scold their child and say "you already got so many toys at home".

These action or words will not satisfy your child and thus they will feel sad and they don't like you. They don't understand why they can't have what they want. If this happens repeatedly, your bond with your children may be affected negatively.

I think the better way is to explain properly to the child. For example: this toy costs RM50, and we need to work hard for the money. RM50 can buy you food to eat for 10 days. If we donate the RM50 to other children in Africa who live in hunger, it will buy them enough food to eat for 10 days and this may save their lives. So do you want to spend the money on your toy or save it?

Of course when there is a chance, let your children throw some money into donation box. From this example, not only your child will learn to save, but also helping other people.

The best way to teach our children about saving is to lead by example. You just can't expect your child to save if you yourself is spending money like no tomorrow.

I am fortunate enough to have parent that basically don't spend a lot, especially my dad. He drove old second hand car, wore old clothes, old shoes, old watch and ate very simple food, sometimes to an extent that I think has gone overboard.

Though he is no more with me, I'm glad to say that I have certainly inherited this "saving gene" from him. 

So, teach your children to save and spend wisely before it is too late.