Piggy Bank Principles: Spending and Saving for Young People
- Monday, March 03, 2014
“I have a lot of money!” My 5-year-old brother exclaimed, as he excitedly dumped out his piggy bank earlier today. Turns out he only had about $3.65. It makes me laugh, thinking of how people’s perceptions of money change as they get older.
Back in my early days, money had two purposes: you spent it or you saved it (or tried to save it and usually ended up spending it on something smaller). I remember the time I had the grand idea that my younger sister would get a watch that came in a cereal box while we “jointly” saved to buy me a new watch. I had forgotten about it by the next day, which, I think, was a good thing. Now that I’m not 7 anymore, I see the unfairness of such an economic endeavor.
When I was 7 or 8, I would buy small things as soon as I got my hands on any money. Then, as I got older, my interests changed but not my spending philosophy, as you’ll soon see. I started to be a bit smarter with my money around the age of 12, learning about a whole new element of spending.
My parents have always taught me and modeled for me the importance of good money management—things such as being generous, choosing purchases wisely, and saving my money. However, it wasn’t until a few years ago that I seriously started to manage my money.
When I was in my freshman year of high school, I did a study on what the book of Proverbs says about money (part of Wisdom for Life: A Proverbs Bible Study by Sonya Shafer of Simply Charlotte Mason). The Bible does have a lot to say about money! Along the same lines, Math-U-See’s Stewardship Instruction Pack also does a really good job of putting the focus on being wise stewards of our resources.
Now, as a homeschool graduate, I’ve realized that money management can be divided into three simple categories: spend, save, and give:
Most of the time this ends up being the biggest category. The most helpful tool that I’ve found is free printable accounting sheets. When I write down exactly what I spend my money on, I’m much less likely to spend a little here and there. Unfortunately, it is true that it all adds up.
I didn’t used to do this, but when I went back a few years later to write down what I had spent, the result was . . . shocking. Back then, my “thing” was plastic model horses. This is what part of my accounting sheet looked like from the year when I was 11:
- March—model horses: $22.00 (There goes most of my birthday money.)
- May—horse statue: $3.00 (There goes the rest of my birthday money.)
- July—two more horses: $6.00
- September—yet another horse: $15.00
That’s nearly fifty dollars! And of course, I didn’t write it down, so I didn’t know.
Another good thing to remember is to avoid buying on impulse. You can think so much more rationally when—well—you think. Unfortunately, I didn’t do this for a long time either. I would get some money and want to spend it right away. Usually, though, the item is still available after waiting a day or two—unless it’s on eBay. But that’s an entirely different story.
This can be done (assuming, of course, that it will be kept up for more than a day) in a couple of different ways. The classic bank account is one method, but it’s not the only one. A “low-tech” approach that I learned about through Math-U-See is the “envelope system.” You take an envelope and simply add money to it as you earn/are given it. One of the good things about money is that saving a little bit very often adds up just as fast as spending a little bit very often (but with much happier results).
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