Losing your money to a missell can be frustrating. But for Shyam and Priya Sunder, who founded PeakAlpha Investment Advisors, a financial planning firm in Bengaluru, it was a life-changing experience. When they moved back to India in 2003 after holding corporate jobs in London for about five years, they entrusted their bank to manage their savings. The bank representative parked a chunk of their money in unit-linked insurance plans (Ulips) that sliced away 60% of the principal in costs.

Having burnt their fingers by trusting their bank representative, they decided to cut through the sales pitch not just for themselves but also for other unsuspecting investors. This was their calling to take up financial planning as their profession. “Starting out as financial planners was a huge risk as we had to start from scratch. So for us our savings and investments were crucial as was staying within a budget," said Priya, director and co-founder, PeakAlpha.

For the couple, sticking to a budget was important and it was this concept that their children, Sangeeta, 20, and Harsha, 18, imbibed from their parents. “When you stick to a budget you are able to appreciate the importance of delayed gratification and our children grew on a steady diet of this concept," added Priya.

For Sangeeta, this is a lesson learnt for life. “I was 15 when my parents started giving pocket money. And that was my budget for the month. I would meticulously plan my expenses and then keep a track. This also meant I didn’t give into impulses and planned my purchases," she said. Sangeeta is in her final year of business management at Kings College, London. As a child, planning for expenses meant Sangeeta saved her pocket money which is now invested, but this trait is now hard-coded in her personality. “When I got an internship, I decided to spend part of the salary for travelling. So I chalked out a budget and then planned everything around it," said Sangeeta.

Read: How should you plan for your child’s future

As is often misunderstood, sticking to a budget doesn’t really mean depriving yourself; what it really means is prioritising. “If we wanted something our parents always got it for us, but there was always a healthy debate on necessary and unnecessary purchases. Even now I ask myself whether I really have to spend that money. For instance, I am still using a five-year-old phone simply because I never really found the need to get a new one. Our parents have taught us how to best use our money and how to make it work better," said Harsha, a first-year pursuing a BS in business with a concentration in finance and accounting at Stern School of Business at the New York University. 

Being able to distinguish between necessary and unnecessary spends kept the heat of peer pressure off the children. “A healthy conversation was what underlined our growing up years. Our parents made us understand why it was important to value money. This is similar to how they speak with their clients," said Sangeeta.

Read: Treading the saving path early on

According to Shyam, managing director and co-founder, good money habits can’t be drilled into the children, they have to be imbibed and that happens if the parents lead by example. “Being a household of financial planners, the kids picked up money concepts like growth, compounding, asset allocation, delayed gratification and time value of money fairly early. But that’s just awareness. You need to put these concepts into practice as a household for the child to learn and imbibe good money habits," said Shyam. 

For the Sunder household, therefore, imparting money habits to children was by leading through example.

Read: Having the patience to let savings match with goals

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