When I joined the finance industry 14 years ago, my mentor and Boss once shared with me, “Life is seasonal, we must prepare for what is ahead.” Being a 25-year-old financial planner who is university educated, I thought I understood what he was talking about. Well, I did. Theoretically.
I worked hard at my craft. Going for 20 – 25 business meetings every week. Often meeting clients who would become friends, till well past 10pm and still wake up for exercise at 7am with my colleagues. Energy seemed boundless. It was my time of sowing.
When I was very young in my business, a friend who married young and had her first child at 26. She told me, “I have no choice but to quit my work and take care of my child full time.” I am pretty sure I did not comprehend what she meant by that. Being young and immature, I judged her. In my head, I wondered why the grandmother was not helping to care for her child, or why she did not send her child to childcare. As karma would have it, I curiously found myself in the exact same position ten years later. No family support and sending my child to infant care at a tender age of 7 months old.
I am not here to discuss if being a stay at home mother (SAHM) is better or being a full-time working mother (FTWM) is better. I have a friend who is a SAHM, she shops on Taobao and makes every cent count by hunting for bargain deals. Another friend, a FTWM who travels a lot for work. She brings home toys and gadgets from her travels and makes every moment with her children count, sewing them clothes, baking for them, bringing them outdoors for activities. Both options require sacrifices.
What has all of the above got to do with financial planning? You see, when I craft a financial plan for my client, the assumption is often that the income is constant. When I was single, or when I have not had children, that seem to make absolute sense. How often is it really constant? Does that give my client choices?
In the last couple years of my business, I have encountered at least five instances whereby my clients ask me, “do you think we can afford for me/my wife to be a stay home dad/mum?” Often, I rework their figures. if they are earning a good income, with a very simple lifestyle, they might be able to do it.
Chatting with other parents, I find recurrent themes in their challenges:
- “Villages” are getting smaller
When we were young, family units seemed bigger – we were all under one roof. I lived with my grandmother, my family, 3 uncles, their wives and children. My mother worked, when she came home from work, she cooked for the whole family. Care for the children mainly fell upon my grandmother or whoever was in the house. Many mothers do not have that privilege currently. Working mothers depend on infant/child care centres or leave their children to the care of foreign domestic helpers.
- Increasing Living Costs
Based on a 2017 research by MSF (Ministry of Social and Family Development), the percentage of dual-income families rose from 45.9% in the year 2000 to 65.6% in the year 2010. In the bid to provide more or a better life for our children, we see more full-time working parents.
Gone are the days we just played and went to school and kind of hope for the best when it comes to the exams.
Parents nowadays send their children to infant swimming classes, interest classes like piano, ballet, swimming, drama. When they are older, they go for English, Mandarin, Mathematics. Science enrichment. All this needs money.
With villages or support systems becoming smaller or non-existent and the cost of living continually increasing, we need to make informed decisions more than ever. My clientele consists of working professionals, young families. I often find that my role as a financial planner is more like that of a career counsellor. I do not just plan their finances; we discuss their life choices.
My parents’ priorities were to provide a roof over our heads, food on the table (evidenced by how my parents are still constantly offering and stuffing my son with food), and an education. I am ever thankful that my parents provided all that more than sufficiently. If I asked 10 full time working mothers today if they wish they have more time with their children, at least 8 of them will say yes. Maybe I am greedy, I want to do more, and I want to do better for my children.
Financial planning is life planning. It is lifestyle planning. It is planning the life you want with your loved ones.
In part 2 of this article, I will address the ways where women (or men) can plan for this in advance.