Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • Former MSE Helen
    • By Former MSE Helen 3rd Feb 11, 12:18 PM
    • 2,324Posts
    • 971Thanks
    Former MSE Helen
    "12% savings, 100% interest debts, that'll teach 'em" blog discussion
    • #1
    • 3rd Feb 11, 12:18 PM
    "12% savings, 100% interest debts, that'll teach 'em" blog discussion 3rd Feb 11 at 12:18 PM
    This is the discussion to link on the back of Martin's blog. Please read the blog first, as this discussion follows it.





    Please click 'post reply' to discuss below.
    Last edited by Former MSE Helen; 03-02-2011 at 12:20 PM.
Page 1
  • westieangel
    • #2
    • 3rd Feb 11, 12:29 PM
    • #2
    • 3rd Feb 11, 12:29 PM
    great idea, my LO is a bit too young to understand that but i love the idea!
    • Coveredinbees!!!!
    • By Coveredinbees!!!! 3rd Feb 11, 12:33 PM
    • 3,187 Posts
    • 1,975 Thanks
    Coveredinbees!!!!
    • #3
    • 3rd Feb 11, 12:33 PM
    • #3
    • 3rd Feb 11, 12:33 PM
    100% you're a loan shark!!

  • catnicex
    • #4
    • 3rd Feb 11, 12:43 PM
    not yet...
    • #4
    • 3rd Feb 11, 12:43 PM
    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
    • By Silverjan 3rd Feb 11, 12:44 PM
    • 19 Posts
    • 20 Thanks
    Silverjan
    • #5
    • 3rd Feb 11, 12:44 PM
    • #5
    • 3rd Feb 11, 12:44 PM
    12% - where? - I want some of that!!
  • Errata
    • #6
    • 3rd Feb 11, 12:48 PM
    • #6
    • 3rd Feb 11, 12:48 PM
    Send that mum a bottle of champagne
    .....................I'm smiling because I have no idea what's going on ...
    • Terri31
    • By Terri31 3rd Feb 11, 1:24 PM
    • 44 Posts
    • 31 Thanks
    Terri31
    • #7
    • 3rd Feb 11, 1:24 PM
    • #7
    • 3rd Feb 11, 1:24 PM
    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
    • By JulieGeorgiana 3rd Feb 11, 1:31 PM
    • 2,467 Posts
    • 12,987 Thanks
    JulieGeorgiana
    • #8
    • 3rd Feb 11, 1:31 PM
    • #8
    • 3rd Feb 11, 1:31 PM
    100% you're a loan shark!!
    Originally posted by Coveredinbees!!!!
    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!

    Send that mum a bottle of champagne
    Originally posted by Errata
    Thank You!
    We spend money we don't have, on things that we don't need, to impress people we don't like. I don't and I'm happy!

    Mortgage Free Wannabe
    Overpayments Made: 5400 - Interest Saved: 11,550 - Months Saved: 24
  • Hooloovoo
    • #9
    • 3rd Feb 11, 1:34 PM
    • #9
    • 3rd Feb 11, 1:34 PM
    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
    • By JulieGeorgiana 3rd Feb 11, 1:44 PM
    • 2,467 Posts
    • 12,987 Thanks
    JulieGeorgiana
    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 ...
    Originally posted by Hooloovoo
    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???
    We spend money we don't have, on things that we don't need, to impress people we don't like. I don't and I'm happy!

    Mortgage Free Wannabe
    Overpayments Made: 5400 - Interest Saved: 11,550 - Months Saved: 24
    • trynsave
    • By trynsave 3rd Feb 11, 3:10 PM
    • 796 Posts
    • 1,068 Thanks
    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
    • JulieGeorgiana
    • By JulieGeorgiana 3rd Feb 11, 3:34 PM
    • 2,467 Posts
    • 12,987 Thanks
    JulieGeorgiana
    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
    Originally posted by trynsave
    12% is his APR, so he gets 1% a month, which is only 10p for every 10! (He has 60 in the bank)

    He did himself a little table in his diary (yes I know!) where he keeps track of how much I owe him!!!

    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!

    Thanks

    I set aside 10 a month every pay day... his pocket money is on a sliding scale (he get's 2 a week for tidying his room, but I minus 20p for each thing which isn't tidy!) and if he does extra chores he can earn money....!

    Pay day for him is Wednesday!

    He is normal though... because he NEVER earns all 10 over the month
    Last edited by JulieGeorgiana; 03-02-2011 at 3:43 PM.
    We spend money we don't have, on things that we don't need, to impress people we don't like. I don't and I'm happy!

    Mortgage Free Wannabe
    Overpayments Made: 5400 - Interest Saved: 11,550 - Months Saved: 24
  • jazzazap
    Brilliant idea. Hope more parents do the same.
    • Voyager2002
    • By Voyager2002 4th Feb 11, 9:16 AM
    • 13,489 Posts
    • 9,318 Thanks
    Voyager2002
    My son learnt quite a bit about money from playing 'Railroad Tycoon'.
  • Mr Forgetful
    I love this.

    After years of forking out money on cheap toys or a comic for a fiver I have been trying to teach my 6 year old daughter the concept of saving for something bigger and better. She has joined an after school club recently where they get rewarded with stickers and they can trade a number of stickers for a reward from the cupboard. They get up to 3 stickers at a time and my little one is saving for the biggest toy that is 125 stickers! I think she has finally got the idea of saving.

    I am going to do your pocket money idea now.
    • TDQO
    • By TDQO 4th Feb 11, 2:20 PM
    • 803 Posts
    • 1,452 Thanks
    TDQO
    This is a fantastic idea, great bit of parenting!
    The size of a glory hole in an open pit should not be greater than the cross-section of the haul trucks that dump into it. Otherwise, you are bound to lose a truck, sooner or later. Source: Sergio Cha

    I'm sorry for the demon I've become but you should be sorry for the angel you are not.
    • JulieGeorgiana
    • By JulieGeorgiana 4th Feb 11, 3:08 PM
    • 2,467 Posts
    • 12,987 Thanks
    JulieGeorgiana
    This is a fantastic idea, great bit of parenting!
    Originally posted by TDQO
    Thank You

    My son loves this thread... he thinks he's famous! He's trying to earn more money to save now... I will be poor soon
    We spend money we don't have, on things that we don't need, to impress people we don't like. I don't and I'm happy!

    Mortgage Free Wannabe
    Overpayments Made: 5400 - Interest Saved: 11,550 - Months Saved: 24
    • de1amo
    • By de1amo 4th Feb 11, 3:10 PM
    • 3,278 Posts
    • 10,921 Thanks
    de1amo
    my wife and i run seperate financial lives and i wish i could get a formula to disuade her from treating me as the bank of hubby= i have just bought her a car and told her she must pay me back half of the car and she seems positive but i know in 6 months she will have convieniently forgotten the debt and moved onto some other ~must have~the car loan is interest free which is bad business i know! What rate shall i come up with if she fails on any payment- she never saves despite earning as much as me and i run the household bills-
    Last edited by de1amo; 04-02-2011 at 3:13 PM.
    mfw'11 No68- 55k mortgage İO--little to nothing saved! i must do better.
  • Errata
    Your son is famous ! I suggest he is due a prize commensurate with his age. A moneysaving book signed by Martin Lewis with a suitable message would be very appropriate.
    .....................I'm smiling because I have no idea what's going on ...
    • JulieGeorgiana
    • By JulieGeorgiana 4th Feb 11, 3:22 PM
    • 2,467 Posts
    • 12,987 Thanks
    JulieGeorgiana
    my wife and i run seperate financial lives and i wish i could get a formula to disuade her from treating me as the bank of hubby= i have just bought her a car and told her she must pay me back half of the car and she seems positive but i know in 6 months she will have convieniently forgotten the debt and moved onto some other ~must have~the car loan is interest free which is bad business i know! What rate shall i come up with if she fails on any payment- she never saves despite earning as much as me and i run the household bills-
    Originally posted by de1amo
    This is a toughie... I look after all our family income. I would have bought a 2k car I could afford without a loan. As I am one to wait until I have the money before I buy (well I am now). Even my car was bought at 10 months old because it was 30% cheaper then new.

    TBH my Husband sounds like your wife, this is why I look after the finances now

    I don't think charging interest will make her pay up any better the 0%! I think the best thing is not to buy something usless you have the money first, then go 50/50!
    We spend money we don't have, on things that we don't need, to impress people we don't like. I don't and I'm happy!

    Mortgage Free Wannabe
    Overpayments Made: 5400 - Interest Saved: 11,550 - Months Saved: 24
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

685Posts Today

6,988Users online

Martin's Twitter