Monday, April 18, 2011

The saving habit

It used to be that financial institutions give out piggy banks to encourage children to start saving from young. This builds up a saving habit in children. They learn to handle money in a responsible manner. It is a pity that we do not see so much of this anymore. Many banks have forgotten the important role they used to play in society.

People need to be able to save, no matter how much they earn. For the young, it is the habit that counts, not the dollars and cents. Some young people think that they will start saving when they reach a certain income level. They think that once they start earning a bigger salary, they can put away a lot more in a shorter time; that the small amounts they squirrel away now wll not make much of a difference the next day. That is just wishful thinking; the bar just keeps getting higher and the right time to save never comes.

As parents we need to cultivate the saving habit in our children, whether rich or poor. It is this habit that will see them though life long after we are no longer able to watch over them. We hope that they will not spend down to their last dollar at the end of every month. If the pocket money we give to our children disappears completely at the end of each week, we have failed in our duty.

Children, when you leave home as an adult, you gain some but not total independence. You will not be financially independent for many more years to come. That happens only when you have built up sufficient savings. You need to cultivate the saving habit now. You goal should be to have a savings account that grows every week, only to be used with utmost discretion. I hope my children read this blog and remember always.

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