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

Lokolo_2

LOL I am not charging Tax on Interest (Yet!) we have discussed tax, but he doesn't get why the government tax the wages, and then tax the goods!

I'm 21 and still haven't figured the logic to that one out either :rotfl:

JulieGeorgiana

wildfrog wrote: »

Amazing, I love this idea. I bet he will also have great memories of the time you spend teaching him as he growing up when he is older due to this. How many 8 year olds (or 18 year olds!) know about how to bulk out food or batch cooking?! The banking idea is awesome. If I do half as good a job of raising my boys as you are doing with yours I will be very proud.
My boys are still very young (3ys and nearly 1yr) but I think I will have a tendency to be one of these parents who fall into the trap of trying to do everything for their children rather than showing them how to do it themselves, and allowing them to make mistakes. I will need to fight this tendancy I think, for their sake and mine!

I agree it makes you closer... And once you start teaching them, you see how much pleasure it gives them, and you see how they thrive and it makes it all worth while.

Percy1983

You are ignoring compounded interest, 1% a month is 12.68% APR...

Anyway I will do a similar thing when mini me's are around, but I will give much more realistic rates, in short whatever I am earning or paying on saving and debts.

Gorgeous_George

Percy1983 wrote: »

You are ignoring compounded interest, 1% a month is 12.68% APR...

Anyway I will do a similar thing when mini me's are around, but I will give much more realistic rates, in short whatever I am earning or paying on saving and debts.

Those rates would only be 'realistic' if mini me has the same credit score and risk profile as yourself. Don't over-analyse - the best ideas are simple.

GG

JulieGeorgiana

Percy1983 wrote: »

You are ignoring compounded interest, 1% a month is 12.68% APR...

Anyway I will do a similar thing when mini me's are around, but I will give much more realistic rates, in short whatever I am earning or paying on saving and debts.

A child wouldn't save if they were getting realistic rates. I tried that already... even at a high rate of 2% on £60 is 10p interest a month... what young child would consider saving their money for a £1.20 a year return??

And I agree with GG that means they might get 9.9% on a debt... where is the incentive to save and not spend?

The point is the lesson I am trying to teach my son... By the time he is 18 I will have brought it to realistic amounts... but right now... he needs the incentive.

A child of 8 needs the whole idea to be exaggerated... in order to encourage them to do things the right way.

They have to make their own choices... it's our job to help them make the right one.

Errata

A child of 8 needs the whole idea to be exaggerated... in order to encourage them to do things the right way

The percentages you've decided on are straightforward and simple enough for your child to understand and accept. That's the important thing.

catnicex

the only thing that makes me a bit concerned about all this process and financial education (that I fully support) is that somehow it helps pushing the idea that everything is about the money and rewards (i.e. I do something only because I then get a reward).
Somewhere I think we need to find the place to "communicate" that sometimes even free (not paid) actions are good in themselves for ourselves and the society more in general.
Otherwise it all becomes a matter of how you play the financial game better than others and over time, when the amount of money becomes significant, it tends to generate the financial system we all criticizes in other posts.
"In medio stat virtus"
Any idea?

de1amo

i just asked for a loan of about 3 quid from my daughter and was flatly refused!! it was to pay the water man because i only had a 50 note--my daughter knows the value of money too much i sense!!--and the things i do for her!!!!!!--i think i will charge her by the hour for using my laptop in future -i bought it on interest free but it needs paying for--just thinking how much is the going rate for board and lodging lol