Father Sez

From and to parents - parental advice to our children on personal financial management and life.
Search Blog

So my younger children now save money, what next?

Monday April 20th, 2009 by fathersez

I have written about our system of giving allowances to our three younger children (15,14 and 10). This has been going on for more than a year now. We started with weekly allowances in late 2007 and this year changed to monthly allowances for the elder 2.

Our youngest girl still gets a weekly allowance. In addition, they are supposed to keep accounts of their spending.  Here our youngest girl is the most disciplined. Daily she updates her accounts book with the amount she spent and the amount she put into her savings box. Our boy, the 15 year old seems to have absolutely no concern about his accounts. I have changed back his routine to a weekly allowance. I think I have to monitor and bug him a little more weekly. Nana, our 14 year old girl, writes the neatest accounts. However I suspect that some of her accounts are, well, a little fudged.  

There have been some adjustments made along the way. At the end of last year, it was found that the physical money in hand was much less than what was supposed to be as per their books! So now, I periodically sweep their accounts out and give them a signed IOU.  

However, one thing is clear. All the three save part of their allowances. I insist that they should save at least 10%, a sort of a paying themselves first, guideline. The children save more, something that I am pleased with. Now what should be the next issue that I should try to impart to them? 

I am not completely done with what I had planned to do, i.e. to discuss with them on what are salaries and wages, how do people spend their salaries, what happens when expenses are more than income and the concept of budgeting, living below our means and paying ourselves first.

Then there is the concept of charity, the giving of gifts and what Lynnae calls ‘Blow money”.

Their next school holidays start on the end of May for 2 weeks. I have made a note in my calendar and Insya’Allah will have the discussion with them then. I’ll keep you posted on their responses.  

Bookmark and Share

3 Comments for “So my younger children now save money, what next?”

On April 27, 2009
At 11:14 am

actually no need to try too hard to come up with any ‘package’ for the kids, expose the real world to them at earlier age the better. ie. do you receive pocket money ? if not, why do you pay them pocket money? Do you pay tax ? why don’t they need to pay tax. Same goes with EPF, service tax, government tax etc. 10% force saving is suitable for 3-5 years old young workers, as for kids, force saving should start at 30-60% actually. Good luck !

On April 27, 2009
At 11:16 am

oh ya, one more thing, when you IOU them, you should pay them credit card interest ie. 15% or at least BLR + 2% arrangement, make it official. that would be also a good learning process too, so they will want to save more to lend to you and earn money from papa … heehee

On April 27, 2009
At 1:27 pm


Wah, I don’t know how to charge them tax yet. But you are so right, somehow I have to instill in them that the minimum savings is not enough.

The other issue is interest. I agree with you that I have to let them know that the savings should be invested wisely. But interest is tricky for us as it is forbidden. They all have KLMF accounts. I intend to show the dividends they receive from that to highlight the earnings.

Leave a comment


Blog Subscription

Like what you are reading?
Subscribe to my RSS Feed