I’m a fan of the piggy bank. But it can really ruin your kids if that’s all you teach them about money. A ‘piggy bank mentality’ is probably the root cause of the most common money problems.
What do I mean by ‘piggy bank mentality’?
By that term I mean having a put-and-take mentality about money. The money in the piggy bank is going to be spent on something – usually sooner, rather than later. That’s the point of the piggy – a temporary parking spot for a child’s money.
The problem is that the piggy bank is not focusing on saving money – it’s more focused on spending it.
Sure, money is a tool and it should be enjoyed! And kids need a way to learn how to count money, and how to value the power of spending.
Spending is good – that’s what the money is for.
But, there are many families living paycheck to paycheck with little to no actual savings, the stability of the family (now) is threatened when an emergency occurs. The future is also compromised for lack of college funds or retirement plans.
Don’t let the piggy ruin your kids!
Budgeting should include more than living expenses. Put some money on ICE (for use ‘in case of emergency’).
Financial plans that include both short-term and long-term goals, will expand the budget and put that piggy is in its proper place.
One aspect of financial maturity is learning to have access to money without the intention (or habit) of spending it all.