Many people believe that “no good deed goes unpunished”. This may sound ironic to you, but not all good intentions draw positive results.
There are many financial good deeds that can haunt even the most generous of souls. It is best to approach the following situations with caution.
#1: BEING CONSISTENT WITH YOUR CHILD’S ALLOWANCE
The subject of child’s allowance steers a debate in many parent forums. As a parent, is it your responsibility to provide a monthly allowance for your child? Or, should you make them earn it?
A study showed that teenagers who received allowance did worse on a financial literacy test than their counterparts. Giving a steady allowance without rules takes away the sense of accountability. Ultimately, parents are advised to have their children “work” for the money. Chores may be attached to the amount of allowance they will get. Alternatively, you may provide a given amount of funds to your child. Your adolescent must use his or her budgeting skills to purchase back-to-school items and other essentials.
#2: DONATING TO UNAUTHORIZED CHARITY
With pure intentions in your heart, you decided to donate half of your monthly salary to your local charity. However, you failed to do prior background check on the owners of the nonprofit organization. To your horror, the organization was a complete scam from the start! This scenario can happen to anyone.
As unfortunate as this may sound, not all charities live up to its mission. Before you donate to a charity, take some time to research the organization and the founders. You may also read their annual report and other public financial documents.
Ensure that your donation will go to an honest cause! Go to www.charities.gov.sg for more information.
#3: LENDING MONEY TO FAMILY AND FRIENDS
Let us face it! Money has a potential to put a strain on any relationship. When you lend money to a relative or a friend in need, you may not be certain on whether you can get the money back or not.
On the other hand, you may be in debt to family member. In worst cases, said relative may feel that he or she has the right to exert control over your life or to criticize your spending habits. Imagine the amount of guilt that you will feel!
To avoid conflicts and other misunderstandings, craft a legal agreement that outlines the terms of loan including the interest rate and the repayment schedule.
Have your good financial deeds backfired before? Leave your stories down below!