This Little Piggy Went To The Bank- Femina

Meenakshi Doctor has some tips on how to make saving a habit with your child

A new Barbie, Nintendo Game Cubes, Sony play-stations 2, Pokémon trading cards, a new car — the list of demands is endless and EXPENSIVE! A need to be ‘with it’ with their peer group makes it increasingly difficult to teach kids to be careful with money, when their friends might be inclined to throw it around.

Inculcating a habit of saving can be learnt anytime, but the younger you are, the easier it becomes. Here are 10 ways to try and teach your child how to save.

Piggy Bank: Most children will be excited to own their first piggy bank. It belongs to an old Western tradition when a live pig was a form of financial security for a poor household. A piglet would be bought in spring, fed and fattened up to whatever extent possible using the leftover food and scraps in the poor man’s kitchen. By winter the full-grown pig would be ready for sale to the butcher and fetched a tidy sum. This unique practice became symbolic for the modern day piggy banks, which is meant to have a similar life cycle of a year, and is kept alive by the leftover scraps of money and odd bits of change that go into it. When the capital has grown to a mature amount, the piggy bank is smashed open and the savings are usually substantial.

Play double your money: This is a saving plan that parents find easy to sell to their children, because it is such a good deal! If a child is motivated enough to save Rs 100, you match that saving when your child reaches the magic figure and double it! One mother I know gives her kids very little pocket money, but when gifts (especially money) are received, they go into a locked cupboard and the kid decides what big item she will fund out of that. Then they both keep track, and if she reaches a certain impressive percentage of the amount through her savings, the mother funds the rest. Seems to have worked with them.

Encourage the spirit of competition: This can be done effectively if there is more than one child in the family. Set up a healthy spirit of competition amongst your kids to see who can save the most in a year.

Open a bank/post office account: Open a modest savings bank account with recurring deposit for your child in a bank close to your home. Start with a small amount and make sure your child takes an active part in this process. Let her keep the passbook and chequebook with her. If you are wary of what the power of a bank account can have on her, a non-cheque book account that is still a very safe saving option is the local post office in your area. A Post Office Recurring Deposit Account (RDA) is similar to a recurring deposit in a bank. You invest a fixed amount on a monthly basis. The deposit has a fixed tenure, and the scheme is a powerful tool for encouraging regular and systematic savings.

Go natural: So, your child just cannot save! Every ice cream, cola, candy and salty chips packet is sheer bait for the wallet! One parent says, “As my child was growing up, we taught her the dangers of eating ice cream, chocolates and colas, and she kept away from them! But at the same time we didn’t deprive her of some nice natural ways to beat the heat, quench thirst and be healthy.” Try making home-made ice-cream and natural fruit juices fun and involve your child in this process!

Just say NO: This might not do a lot for your popularity chart at home, but sometimes it is kinder in the long run to take a firm stand and say NO to extravagant requests! But learn to say it in a manner where your child can accept your decision without an ugly showdown or feeling deprived of any of the pleasures of childhood.

Walk your talk: You can’t encourage your child to save when you are a big spender yourself. So set an example. Children absorb a lot of their character and views on everyday life from their immediate family environment. And the chances are that if your child wants to splurge... she learnt it from watching you!

Learn while you earn: Provide your child with incentives that allow her to earn some extra money. This could be through watering the plants at home or washing the car on Sundays. Be enthusiastic about supporting this sprit of enterprise at home and allow your child to figure out that hard work pays better than sitting in front of the television.

Some things come free: Don’t overdo it! Sometimes you have to do things for love. Make sure your child knows when to draw the line at a young age. Cleaning up a room comes free and is part of being responsible. Being nice and well-mannered comes free. Eating up all that spinach on a dinner plate might cost you!

Remember to give back: It’s both good and rare to have a child who wants to save these days. But while it’s important to encourage the habit of saving, it is equally important to share good fortune. Identify a charity that either you or better still, your child, is interested in. Sensitise her to the work that the organisation is doing and let 10 per cent of her savings go to it during Christmas, Diwali, Eid or on New Year’s Day.

Make sure that your child is the ‘giver’ and allow her to feel generous. Nobody loves a miser...

You can’t encourage your child to save when you are a big spender yourself. So set an example.

Inculcating a habit of saving can be learnt anytime, but the younger you are, the easier it becomes.