"12% savings, 100% interest debts, that'll teach 'em" blog discussion

Former_MSE_Helen

This is the discussion to link on the back of Martin's blog. Please read the blog first, as this discussion follows it.

Read Martin's "12% savings, 100% interest debts, that'll teach 'em" Blog.

Please click 'post reply' to discuss below.

westieangel

great idea, my LO is a bit too young to understand that but i love the idea!

Coveredinbees!!!!

100% you're a loan shark!!

catnicex

however, it is one of the first things I am going to teach my daughter (she is only 4 months old... )...

Something else would be the skills on how to use the pivot tables through which I track my daily expenses against my income and monthly assigned budget over time...

I think after the concept of interest rate, savings and debt, the following ones will be self-financed "loan" and amortization (i.e. when I have to buy something that costs a lot, such as a car or a new laptop, not necessarily "expensive", and I "loan myself" the money from my savings "(nearly, because I should the opportunity cost of putting them in a saving account)-interest free" but assigning a fixed monthly payment over a predetermined period of time, such as 3 years or few months).


I hope she won't hate me too much....

A.

Silverjan

12% - where? - I want some of that!!

Errata

Send that mum a bottle of champagne

Terri31

I'm sending this to my daughter - who is a pretty good money manager having got herself out of credit card debt several years ago and uses the tips on this site - cos I keep sending her them - for her to consider doing the same with her little one, who is 2...

JulieGeorgiana

Coveredinbees!!!! wrote: »

100% you're a loan shark!!

I wish! He won't actually borrow money from me! He saves instead because he said he'd rather buy two then give me free money!

Errata wrote: »

Send that mum a bottle of champagne

Thank You!

Hooloovoo

On the other hand - when he's 18 he might just go "wow I can finally borrow money at a reasonable rate!" and go and get all the loans he can find ...

JulieGeorgiana

Hooloovoo wrote: »

On the other hand - when he's 18 he might just go "wow I can finally borrow money at a reasonable rate!" and go and get all the loans he can find ...

You raise a good point, which i have thought about... I am planning lower the rate of both in line with current markets as he grows up.

But, the most important point is that by the time he is 18 he shouldn't need to borrow.

Plus I don't impose high rates and not discuss with him about good debts and bad debts and money management. As Martin has said, it's about education.... and I believe in Educating my son about money!

At 8 he needs more outrageous figures to just start to understand the concept of money!

Would he save money if he got 2 or 3%?

Would be borrow money I don't have and make sensible choices if he doesn't have to think about the conseqences first???

trynsave

Does he get 12% monthly or is that the annual figure?

Also if he continues to save well does he realise that he is only allowed to earn £100pa on money received from parents before he has to pay tax?

Fab idea - would like to use something similar with my 10yr old, though it might mean I have to actually pay up more :cool: