Teaching Children About Financial Discipline.Or Ourselves For That Matter!

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I’m sure we all remember our Parents telling us ‘Don’t spend it all at once’
when they were giving us our weekly pocket money, or when we received
some money off a whiskery old Aunt for a birthday or Christmas.

That’s great, but apart from that and being told to open an interest paying
bank account when we were teenagers, that’s probably all the financial
advice we really ever got as we were growing up.

We all want the best for our kids and we all want them to do better than
we have but in all honesty, do we actually tell them how to best go about
handling money?

The chances are that the majority of us don’t. Why?

Because we’ve never been taught how to do it ourselves!

I always tried to put a bit aside for a rainy day, even in my youthful bachelor
days if there was anything left after beer, clubbing and chasing girls.

What I never had was a strategy for the long term. Sound familiar?
I bet it does to some if not all of you!

Possibly the most valuable money saving advice I’ve heard came to me in
the form of a story called ‘The Richest Man In Babylon’.

I’m currently working my way out of financial difficulty which has come
about due to a combination of bad decision making and bad luck, rather
than by frivolous spending and carelessness.

A lot of people in the WA community have experienced – and are still
experiencing – financial hardship. It is the reason ‘Why’ for a lot of our
people coming here in the first place.

I’ll share the strategy I’m currently using at the end of this post, but first
I’d like to give you a bit of background into one of the most valuable and
most enjoyable stories I’ve had the pleasure to discover as part of my
passion for personal development.

It is set, as the title suggests, in Ancient Babylon. In it, a poor Scribe by
the name of Ahrad is coached on financial discipline by an old, wise and
extremely wealthy mentor by the name of Algemish - a sheep herder
turned money lender.

Algemish’s initial advice to Ahrad is ‘A part of all you earn is yours to keep.’

Ahrad his difficulty comprehending the simplicity of that statement and puts
it to Algemish that surely ALL he earns is his to keep.

Algemish responds: ‘Oh, far from it my friend. Did you not pay the garment
maker? Do you not pay the sandal maker. Do you not pay for the things that
you eat? Can you live here in Babylon without spending?’

He then prompts Ahrad into understanding that if he were to put aside just
one tenth of his earnings, in ten years time he would have saved what he
earns in a whole year.

He finishes off: ‘You pay to everyone except yourself. You only end up
working for others. Pay yourself FIRST. Don’t give to the clothes maker
and the sandal maker more than you can pay out of the rest, and still
have enough for food, charity and penance to the Gods.’

Ahrad decides to try this wisdom out for himelf and finds out how easy it
is to get by when putting just a tiny amount aside from his earnings each
day. Because he has taken that bit for himself first and it is out of sight and
away from temptation he has little difficulty getting by without it.

Ahrad gradually learns how to acquire money, how to keep it and, after
much trial and error, how to invest it wisely through taking advice from
competent people.

Ahrad then goes on to become, as the title says, the richest man in Babylon!

I’m not saying anything that spectacular will happen to me or you, but
I’ve started using a simple and very affordable strategy which will pay for
Christmas every year if it needs to or otherwise can be used to build up a
nice nest egg.

I started on New Years Day this year to put away a penny each day equating
to what day of the year it was. So, on January 1st, one penny got put into the
pot. Well, it was actually £3.01p because I put in £1 for the New Year, £1 for
the new month and £1 for the start of the new week as it was a Sunday.

On 2nd January, I put 2p in the pot, 3p on the 3rd and so on. Every Sunday and
on the 1st of every month an extra £1 goes in on top of the Penny equating
to the number of days in the year so far. Today (Friday 3rd March) I put in 62p
as it’s the 62nd day of the year and on Sunday I will put in £1.64.

This is easily done and such small amounts are barely noticeable, but by doing
this I will have saved £731.95 by the 31st December.

By teaching my two Sons to do this, and setting the right example to them of
doing it myself, they will not only have saved themselves a decent amount of
money by the time they come of age, they will have acquired something of
incalculably more value than the actual amount of money they will have saved.

They will have acquired financial discipline and an understanding of how money
works that will see them safely throughout their whole lives.

Apart from love, I can’t think of any greater gift that parents can give to their
children than financial security. Not by hand outs, but by teaching them the skill.

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Recent Comments

28

I read ‘The Richest Man In Babylon’, back in 1993 when my wife and I were looking at bankruptcy. That little book changed our perspective. Thanks for reminding me of some great practices. "The Compound Effect" by Darren Hardy is really great on showing small daily habitual changes can have a great effect down the road. Thanks again for a great memory.

It's a great story with a great message.
I have the DVD and I still make a point of listening to it at least once a week 10 years after buying it :-)

that's a great strategy and not the first time I've heard it, but you can never hear it enough

Thanks for this.

Your post had a valuable lesson for all of us as parents. My grandmother taught me how to save money and I am indebted to her for teaching me that valuable lesson.

What I learnt I passed onto my children. I gave my son a book called The Richest Man in Babylon written by George Samuel Clason .. Great pearls of wisdom

I still listen to my CD of the Richest Man In Babylon at least once a week 10 years on from buying it. It's a great story with a timeless lesson :-)

Great

Great lrssons!

Excellent suggestion! So many ARE in very bad situations...like me...and this quite do-able.

I have a ceramic cow with white spots on black. When I come back from shopping I will always put the 1 Euro and 2 Euro coins in the cow. After some months this cow becomes real heavy. I then unplug her from her belly and out comes some 250 Euros which I change for paper money and put in the safe. You never know when one needs it.
That was a good story Rich, have a nice weekend.

Regards, Taetske

Great, a lot to learn. Thanks.

Great method for saving. I'm going to try it. Thanks. Debbie

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