To thank her for her speech marking the International Year of Cooperatives, a gray-faced official had thrust a porcelain piggy bank into her hands -- an ugly thing with a milky sheen that appeared to reflect the very coldness said to characterize her policies.
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To paraphrase: If you want to stay healthy financially in the long run, every month you should put aside 10% of your income as savings.
In other words, be frugal. In still plainer words, do not spend every penny you make every month.
Here, piggy bank is, of course, a metaphor. Adults don’t keep a piggy bank. Most of them don’t, at any rate. And so here piggy bank simply represents what piggy banks are for, i.e. the piggy bank mentality, a willingness or awareness to save for a rainy day.
But this ‘your wish my command’ technique is not a healthy practice. Hence it’s in best interest of both the child and parents to instill financial discipline and adopt the technique of ‘value buy’ from early days.
That day will come. That is life, which is full of marvelous miracles – good and also bad, sometimes expected, sometimes unexpected.
“I have stopped buying arbitrary gifts now. I only buy toys during her birthdays. In that manner I keep a tab on my expenses as well her temptations,” he says. “I even ask my daughter to buy some biscuits from the neighbourhood store or give money to the laundry boy, so she understands that she has to spend the money for consumption or service.”
“One of the main problems is that we earn much more than our parents today. And children have many more reasons to spend. Hence it is very important to draw a line from day one,” says Mr Thakur. He says he has already introduced his 4-year-old daughter to a piggy bank. He and his wife make regular contributions to the piggy bank.
“She was very excited about money getting accumulated in her piggy bank. Once she asked me to buy some pencils, I asked her to withdraw money from her piggy bank. Then she realised that it’s a two-way traffic. Money will come into the piggy bank, but goes out depending upon what she wants. I don’t believe in cutting corners for all kinds of expenses. When it comes to health such as paediatrician’s visit or medicines, I always spend. But a pencil or even a toy is a short term pleasure for my daughter. She grows out of it in 2 weeks, and expect new replacements. I don’t want to encourage that behaviour,” he adds.
In short, you’ve got to have foresight to build your financial house strong – by cultivating a piggy bank mentality.
Kamlesh R Thakur, Manager of Pharmaceutical co.
- What Merkel’s Isolation Means For the Euro Crisis, Spiegel.de, May 1, 2012.
Please explain this sentence: In a healthy financial living at least 10% of the income should go to the “piggy bank” for the future or unexpected expense.
1. It’s not easy to control your child’s temptations when he enters a mall or a huge toy store. Often you may find yourself loosening your purse strings just because your kid has set his eyes on a jazzy remote-controlled car or a flashy gun.
Zhang Xin is Trainer at chinadaily.com.cn. He has been with China Daily since 1988, when he graduated from Beijing Foreign Studies University. Write him at: zhangxin@chinadaily.com.cn, or raise a question for potential use in a future column.
Reader question:
“He waited for more than a year and won his bicycle. I am not against spending money on my child or on his demands, but he is growing and he should understand the concept of utility and value. Today it will be a bicycle, tomorrow a bike and then a car. There is no harm in these demands unless he realises that he needs it and hence should work towards buying it.”
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