Family Finance Part II: Saving

by Kelsey Norwood

in Finances

Family Finance Part I: Earning
Family Finance Part III: Spending

piggy bank

Saving money is another key to having a financially secure future, which is what we all want for ourselves and for our families. Start teaching your children to save money when they are young. I live by the following rule: Set aside 10% of all income in a savings account and don’t touch it! You would be amazed at how much of your hard earned money you can hold onto by saving just one out of every ten dollars. If your budget is tight, start by saving as much as you can, even if that’s only two or three percent. Try to work your way up to saving ten percent each paycheck.

Not saving leaves you with nothing to show for your long and hard days on the job. Ten percent of each paycheck really adds up to a substantial amount of money. For example, say I make $3000 per month. If I set aside ten percent of $3000, I would be saving $300 dollars per month, which isn’t a very big chunk out of my paycheck. If I’m watching where I spend and living on a budget, I shouldn’t even miss that $300. If I saved $300 every month, I would save $3600 by the end of the year! I am going to be a lot happier having that money in a savings account to use for an emergency or retirement than blowing it on movies or eating out.

Start practicing saving as much as you can each paycheck, and teach your children to do the same. A child who learns how to save grows into an adult who can stick to a budget and live on less than they earn to avoid getting into debt. You could even practice saving as a family. For example, you could implement an incentive for getting the kitchen clean after dinner. If everyone helps and the cleaning is all done within 15 minutes after dinner, put a pre-determined amount into a special jar. Choose something you want to do as a family, like going on vacation or getting bikes or some other recreational equipment for everyone. Save that money until there is enough to get or do what you all decided on and then take it out and spend it as a family! Once the jar is empty, start over again. This is something we do in our family, and it helps us clean up quickly as well as create a fund for us to use to do something fun together as a family. Your children will learn at least two lessons: (1) cleaning up happens faster when we all work together, and (2) saving money allows us to do something really fun that might cost a lot of money. Saving all that money for something really fun down the road is better than spending everything I earn as soon as I earn it.

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