Wednesday, March 11, 2015

Audrey's Savings Progress for Term 1

I am one who feels uncomfortable about rolling my credit card bills to the next month but I also know it's becoming a trend at least in Singapore. With the credit card culture, many spend their money even before it is earned, and the irony is, these are people who are earning quite a substantial amount.
The sad thing is, sometimes once you start snowballing the debts, it becomes an avalanche.

At the end of last year, I happened to come across this blog entry where this parent shared how she taught her children how save with their daily allowance.

It's amazing how one small act like that can inspire and help many other parents who wanted to teach their child how to save. I for one bought the idea and since the beginning of school I shared on my Facebook that Audrey will be doing this to teach her too how to manage her money.

I modified the mummy's idea a little and this is what I do:

Audrey gets an allowance of $2 a day.
I put 10% ($0.20) in her tithings compartment and another 10%($0.20) in her savings compartment. (I want her to know she needs to save first before she can spend and not spending everything she has and save the remainder)
Because of our monthly expenses on the kids, house, groceries etc, most (if not all) of our income becomes the expenses for the month. While I do the monthly savings from my earnings, our output is definitely more than our savings, which makes us very uncomfortable.
I don't wish the kids to live their month to month like us, given a choice, and I would rather them have such a habit from day 1. Hence, I ask her to save (in other words, "pay" herself first before spending).

The next 10% ($0.20) she puts in the donation compartment.
She is then "free" to spend the remaining $1.60. She doesn't seem to have many things in school that excite her enough to want to buy other than sushi or noodles soup… So she either spends $0.20 (on sushi) or $0.80 (on noodles).
With the remaining money, she comes home to decide whether it goes into the savings or the donations compartment.

Audrey's savings so far...
On average, Audrey donates about $2.40/week to the church's Sunday's collection. She has so far saved $30.10 (as of today), not bad considering she went to school for about 35 days (excluding public holidays and days she were on medical leave).

I got her to use her savings for the more affordable and cheaper things she needs to use. E.g. Audrey tells me her pencils are all too short and needed new pencils. I told her that since she has some savings, she could use her money to buy new pencils for herself, of which she agreed.

I wanted her to learn a few things. That while mummy and daddy can provide, she needs to be independent to learn at times she can be responsible for her own things. Maybe, if it is bought from her own money, she would appreciate more? We can only hope. Subsequently, when she knows the value of things, we will then give her the option to decide whether she wants to spend $2 on 10 pencils or on 4. That would be another lesson to be taught… later.

I have to say, with her weekly savings, Audrey looks forward to going to mass every week. She is always excited during the offertory and proudly puts her money into the bag when the wardens come round each pew. In the past, we would give each kid $10 for donation in church… But now between the two… she rather her money.

I'm sure at one point, when Audrey grows up, she will get a chance to read this blog… somehow, somewhere. And if she gets to read this entry, I hope she knows that mummy is very proud of her. :)

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