Sunday 4th March, 2007

 

Saving money for the future

 
 
 
 
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Did you know that we have some $122 million in circulation in the form of coins alone? And did you know that some 53 per cent of that is made up of one-cent pieces?

For many of us, the introduction to savings was in the form of a piggy bank into which we would put all the coins we received, and delightfully retrieve the stash to buy something our parents would not ordinarily buy for us.

I remember one birthday in early primary school, when Aunty T gave me a $10 savings stamp book. It was the best present ever! I remember the joy I felt when I redeemed that $10 in the post office the year I left primary school.

But the greatest lesson I learnt about the power of money was when I was 18 years old. I was heading off to university abroad on full scholarship, and my parents said I should get some US dollars in cash to travel with. So they sent me to the bank where I had a grand total of $1,700, in my name, to convert to some US$800.

The bank told me that they had no US dollars to change for me. I replied that I had just observed someone else in the bank tender US dollars, to buy TT dollars. The teller informed me that those US dollars were only for their customers.

I replied: I want to close my account. Well! The teller brought the supervisor, the supervisor brought the bank manager, and for all of half an hour according to my Timex watch, they tried to hold on to my $1,700. But they failed, and I felt powerful.

I learnt later on that it wasn’t me that was powerful, it was the money; even a measly $1,700. I learnt, too, that the customer is always right!

Remember last week we posed the question about those of us in the belly of the bell curve? We had differentiated out those in the two ends of the tail and wondered how the economic growth statistics, estimated at 12 per cent for 2006, directly affects us.

We lived within the following framework:

1. The total amount of money in circulation had

increased by 16 per cent.

2. Central bank struggled to reduce the chronic

liquidity in the system

3. Food prices increased by some 27 per cent

4. Investment yields fell by at least four per cent

5. Government spending increased sharply

6. Unemployment fell

7. We spent more to import goods

8. Demand for foreign exchange almost doubled.

In fact we survived; we made it past Christmas, a little like crabs in a barrel. We struggled to keep up our insurance payments, loan payments, and maxed out credit cards. It is more than likely that we bought less expensive food and less expensive clothes in order to maintain the status quo.

There are no current statistics to show how the population responded.

But if you really cannot improve your own condition you must as a necessity improve the future for your children. How?

Get them all a piggy bank in which to save their coins, and all the stray coins from the car, and the laundry. The habit will instil in them the savings ethic.

Then find some creative ways to demonstrate how money is one of the hallmarks of independence, but only if you can earn it in a manner that is honest, tried and tested.

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