Parents’ Financial Ability To Provide For Their Child’s Happiness
Parents’ Financial Ability To Provide For Their Child’s Happiness
On the Soul of Business, Claressa Monteiro speaks to Marcus Chew, Chief Marketing Officer, NTUC Income to find out if a change in parents’ financial ability will affect their child’s happiness.
Claressa Monteiro: You recently commissioned a research that explored the link between parents’ financial preparedness and the impact on our child's happiness. Tell us about some of those key findings.
Marcus Chew: We look at the research from two perspectives - the parents’ point of view and the children's point of view.
From the parents’ point of view, we found out that 3 in 4 parents in Singapore are concerned about not having enough money to provide for things that make their children happy. Especially during the current climate, in some ways it has also created a greater sense of urgency for parents to be financially secure in these unpredictable times. Majority of them, more than 80% agreed that their child's happiness is integral to their happiness, so if their child is happy, they are happy. I think that is a very important point. And because of that, 47% of parents were willing to compromise their own lifestyle in order to financially provide for things that make their child happy.
From the children’s perspective, we asked them about what they feel about the importance of their parents’ financial stability versus their own happiness. It’s not surprising at all that we found out that 90% of children were worried that their lifestyle and happiness could be disrupted if their parents were financially unprepared for life’s unexpected events, and these include things like not going on vacations, not receiving gifts, or not being able to buy the latest gadgets. This is especially true for younger children who are completely financially dependent on their parents. However, children were also concerned about not being able to spend quality time with their parents in the event their parents contract critical illness. So, it is not just about money, although a significant number of contributors to a child’s happiness requires some degree of financial expenditure like amusement park tickets or holidays, but the emotional and material aspects of happiness are also very important. Thus, there is a big correlation between money and a child's happiness.
As far as the parent’s perspective is concerned, as a parent myself, I find that it is normal that we are willing to make sacrifices or give up certain luxuries and comfort in order to ensure that our children have everything that they need.
For me personally, I never thought of it from a child’s point of view that they would feel stressed or concerned and it would become an unhappy situation for them if there was a danger that they would not be able to go on vacations or get the things they want to have because I was always thinking about the sacrifices I could make for them. - Claressa Monteiro
CM: Was there a difference between the preconceived idea of what kind of information you might garner and the actual information you got?
MC: For a start, we wanted to explore a link between parents’ and their child's happiness. We have some type of hypothesis, but it’s still uncertain. However, we do believe that there are many correlations between a parent’s happiness and child's happiness. Also, we would like to establish a correlation between financial security and a child's happiness. We talked a lot about spending time with your kids, but is financial security important as well? Without money, can families still stay happy as per normal?
Overall, the survey revealed that in order for parents to help their children achieve financial stability and happiness, they will need to safeguard themselves financially [first]. As an insurer, our top priority is for our clients to have a good financial safety net so that during unexpected life events, they can still continue to maintain their child’s lifestyle and happiness financially. Also, if they are not financially secured, it may impact their child's future development and happiness. We all know that during unforeseen circumstances such as critical illness or death, a payout can never replace the anguish at the loss of a loved one, but at least it can tide the family over as the last thing you want to worry about is money.
CM: Were there surprising aspects of the research findings?
MC: Yes, the most interesting findings would be the differences between the definition of happiness between parents and children. The survey revealed that parents and children hold totally different views when it comes to defining happiness. Parents thought that their child would be happiest when they were able to pursue hobbies, passion, sports, gaming, or buying presents but on the other hand, children saw experiences such as vacations, staycations, having good relations with their peers and spending quality time with their families as more important to their happiness than just material stuff.
CM: Would you say that there is a considerable percentage of us parents who aren't as financially prepared as we should or could be?
MC: Yes definitely. I think there are a lot of parents who are not exactly financially prepared for unforeseen circumstances (critical illness, total permanent disability, job loss or challenges to the family income).
CM: 70% of parents surveyed indicated that expenses on non-essential items, such as family holidays, would need to take a backseat. But you mentioned that this is one of the things that children look forward to and make them happy. What is the solution then?
MC: The overall financial planning is very important and often, we understand that parents may not view insurance as a financial priority compared to other things like their child's education. But I think insurance is very important to make sure that the “kind of happiness” that they're giving to their child can be continued.
When we filmed the “Semoga Bahagia” campaign recently, I met a film director in his thirties who is a lymphoma cancer survivor. The film director shared that he was glad that he could still buy toys for his young son when he was down with lymphoma cancer and that really struck a chord with us. It was a stressful period after being discharged from the hospital as everything was about his medical bill but fortunately, he had a critical illness plan which helped tide him over this problem.
When we are young, we think that we won’t fall ill. We are more concerned about job security, especially during this tough economic situation. Unfortunately when it comes to things like critical illness, sometimes it just hits you and you may need to take a break from work.
CM: As parents, what can we learn from this survey before we talk about what actions we can take?
MC: As parents, we know that we are responsible for the financial stability of our children, especially young kids as they are 100% dependent on us. So, we need to make sure that we are secure financially in order to protect our child’s interest and their happiness through the things they want to do. Unforeseen circumstances can also happen anytime and this will put a strain on your financial abilities and your long-term savings plan. I think it is very important for a parent to plan for all these [situations].
For parents, it is good to have a good habit of financial planning so that they can educate their children and in the future, we [hope that we] will have a generation of children who know how to manage their finances better when they grow up to be parents themselves.
CM: There are so many insurance instruments [available] now that as parents, as adults, it can be quite overwhelming and confusing. What kind of insurance should we be considering [so as] to work towards a more financially-prepared position?
MC: The one thing I want to change is everyone’s perception that critical illness plans are expensive when they're actually not. In my perspective, a critical illness plan is the most important because even in the event that you have to take a break from your job due to critical illness, everything else can still go on. Of course your savings might [have to] take a back seat, but at least everything else can go on as per normal while you take a break, spend time with your family and focus on your recovery
CM: Based on a scenario of a family of 4, both parents in their mid- to late-forties and they have a 10 year old and 12 year old child. They are thinking of financial preparedness but feel that they are too old to start a financial plan or critical illness plan. Are they too old?
MC: No, you’re never too old. Even when you are 50 or 60 year of age, it's never too late. I have a friend who just started another round of retirement planning at 56 years old. So, it's never too late. It is just a matter of whether you start or not. Of course, when you start later, you [might have to] pay more, therefore it is good to start young. If you have a child who is 10 or 12 years old, I think it's definitely critical [to be financially prepared]. Also from the survey results, it was shown that it is our responsibility to make sure that we are financially secure so that it doesn't impact the child at 10 to 12 years old as they [probably] need another 10 years before they can start working. They are relying on you entirely to provide for them financially.
For more, tune in to Workday Afternoon with Claressa Monteiro on weekdays from 1PM to 4PM.
This interview was broadcasted on MONEY FM 89.3 on 19 October 2020.
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